10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Quarterly Period Ended March 31, 2019

OR

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                     to                     

Commission file number: 001-16751

ANTHEM, INC.

(Exact name of registrant as specified in its charter)

INDIANA	35-2145715
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification Number)
220 VIRGINIA AVENUE INDIANAPOLIS, INDIANA (Address of principal executive offices)	46204 (Zip Code)

Registrant’s telephone number, including area code: (800) 331-1476

Not Applicable

(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes x No  ¨

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes  x    No  ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer”, “accelerated filer”, “smaller reporting company”, and “emerging growth company” in Rule 12b-2 of the Exchange Act:

Large accelerated filer	x	Accelerated filer	¨
Non-accelerated filer	¨	Smaller reporting company	¨
Emerging growth company	¨

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ¨    No  x

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date:

Title of Each Class	Outstanding at April 15, 2019
Common Stock, $0.01 par value	257,195,705 shares

Anthem, Inc.

Quarterly Report on Form 10-Q

For the Period Ended March 31, 2019

Table of Contents

		Page
PART I. FINANCIAL INFORMATION
ITEM 1.	FINANCIAL STATEMENTS
	Consolidated Balance Sheets as of March 31, 2019 (Unaudited) and December 31, 2018	2
	Consolidated Statements of Income (Unaudited) for the Three Months Ended March 31, 2019 and 2018	3
	Consolidated Statements of Comprehensive Income (Unaudited) for the Three Months Ended March 31, 2019 and 2018	4
	Consolidated Statements of Cash Flows (Unaudited) for the Three Months Ended March 31, 2019 and 2018	5
	Consolidated Statements of Shareholders’ Equity (Unaudited) for the Three Months Ended March 31, 2019 and 2018	6
	Notes to Consolidated Financial Statements (Unaudited)	7
ITEM 2.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	38
ITEM 3.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	52
ITEM 4.	CONTROLS AND PROCEDURES	52
PART II. OTHER INFORMATION
ITEM 1.	LEGAL PROCEEDINGS	52
ITEM 1A.	RISK FACTORS	52
ITEM 2.	UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	53
ITEM 3.	DEFAULTS UPON SENIOR SECURITIES	53
ITEM 4.	MINE SAFETY DISCLOSURES	53
ITEM 5.	OTHER INFORMATION	53
ITEM 6.	EXHIBITS	54
SIGNATURES		55

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PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

Anthem, Inc.

Consolidated Balance Sheets

	March 31, 2019			December 31, 2018
(In millions, except share data)	(Unaudited)
Assets
Current assets:
Cash and cash equivalents	$	4,482		$	3,934
Fixed maturity securities, current (amortized cost of $17,550 and $16,894)	17,795			16,692
Equity securities, current	1,211			1,493
Other invested assets, current	20			21
Accrued investment income	161			162
Premium receivables	5,049			4,465
Self-funded receivables	2,491			2,278
Other receivables	2,639			2,558
Income taxes receivable	—			10
Securities lending collateral	591			604
Other current assets	2,172			2,104
Total current assets	36,611			34,321
Long-term investments:
Fixed maturity securities (amortized cost of $482 and $486)	492			487
Equity securities	33			33
Other invested assets	3,710			3,726
Property and equipment, net	2,799			2,735
Goodwill	20,500			20,504
Other intangible assets	8,925			9,007
Other noncurrent assets	1,453			758
Total assets	$	74,523		$	71,571
Liabilities and shareholders’ equity
Liabilities
Current liabilities:
Policy liabilities:
Medical claims payable	$	8,242		$	7,454
Reserves for future policy benefits	78			75
Other policyholder liabilities	2,577			2,590
Total policy liabilities	10,897			10,119
Unearned income	998			902
Accounts payable and accrued expenses	3,951			4,959
Income taxes payable	105			—
Security trades pending payable	158			197
Securities lending payable	590			604
Short-term borrowings	1,095			1,145
Current portion of long-term debt	851			849
Other current liabilities	4,037			3,190
Total current liabilities	22,682			21,965
Long-term debt, less current portion	17,396			17,217
Reserves for future policy benefits, noncurrent	719			706
Deferred tax liabilities, net	2,116			1,960
Other noncurrent liabilities	1,612			1,182
Total liabilities	44,525			43,030
Commitment and contingencies – Note 11
Shareholders’ equity
Preferred stock, without par value, shares authorized – 100,000,000; shares issued and outstanding – none	—			—
Common stock, par value $0.01, shares authorized – 900,000,000; shares issued and outstanding – 257,354,383 and 257,395,577	3			3
Additional paid-in capital	9,482			9,536
Retained earnings	21,136			19,988
Accumulated other comprehensive loss	(623		)	(986		)
Total shareholders’ equity	29,998			28,541
Total liabilities and shareholders’ equity	$	74,523		$	71,571

See accompanying notes.

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Anthem, Inc.

Consolidated Statements of Income

(Unaudited)

	Three Months Ended   March 31
(In millions, except per share data)	2019			2018
Revenues
Premiums	$	22,843		$	20,903
Administrative fees and other revenue	1,545			1,439
Total operating revenue	24,388			22,342
Net investment income	210			229
Net realized gains (losses) on financial instruments	78			(26		)
Other-than-temporary impairment losses on investments:
Total other-than-temporary impairment losses on investments	(13		)	(8		)
Portion of other-than-temporary impairment losses recognized in other comprehensive income	3			—
Other-than-temporary impairment losses recognized in income	(10		)	(8		)
Total revenues	24,666			22,537
Expenses
Benefit expense	19,282			17,046
Selling, general and administrative expense	3,166			3,428
Interest expense	187			184
Amortization of other intangible assets	87			80
(Gain) loss on extinguishment of debt	(1		)	19
Total expenses	22,721			20,757
Income before income tax expense	1,945			1,780
Income tax expense	394			468
Net income	$	1,551		$	1,312
Net income per share
Basic	$	6.03		$	5.13
Diluted	$	5.91		$	4.99
Dividends per share	$	0.80		$	0.75

See accompanying notes.

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Anthem, Inc.

Consolidated Statements of Comprehensive Income

(Unaudited)

	Three Months Ended   March 31
(In millions)	2019		2018
Net income	$	1,551	$	1,312
Other comprehensive income (loss), net of tax:
Change in net unrealized gains/losses on investments	357		(245		)
Change in net unrealized losses on cash flow hedges	3		29
Change in net periodic pension and postretirement costs	3		7
Other comprehensive income (loss)	363		(209		)
Total comprehensive income	$	1,914	$	1,103

See accompanying notes.

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Anthem, Inc.

Consolidated Statements of Cash Flows

(Unaudited)

	Three Months Ended   March 31
(In millions)	2019			2018
Operating activities
Net income	$	1,551		$	1,312
Adjustments to reconcile net income to net cash provided by operating activities:
Net realized (gains) losses on financial instruments	(78		)	26
Other-than-temporary impairment losses recognized in income	10			8
(Gain) loss on extinguishment of debt	(1		)	19
Deferred income taxes	55			(51		)
Amortization, net of accretion	255			240
Depreciation expense	34			30
Share-based compensation	70			42
Changes in operating assets and liabilities:
Receivables, net	(753		)	37
Other invested assets	(21		)	(7		)
Other assets	(125		)	(392		)
Policy liabilities	791			(561		)
Unearned income	96			1,182
Accounts payable and accrued expenses	(1,029		)	(300		)
Other liabilities	675			147
Income taxes	115			537
Other, net	(15		)	(54		)
Net cash provided by operating activities	1,630			2,215
Investing activities
Purchases of fixed maturity securities	(2,300		)	(2,236		)
Proceeds from fixed maturity securities:
Sales	1,075			1,864
Maturities, calls and redemptions	393			363
Purchases of equity securities	(3,691		)	(566		)
Proceeds from sales of equity securities	4,048			1,776
Purchases of other invested assets	(78		)	(72		)
Proceeds from sales of other invested assets	113			23
Changes in securities lending collateral	14			(158		)
Purchases of subsidiaries, net of cash acquired	—			(1,346		)
Purchases of property and equipment	(234		)	(218		)
Other, net	8			4
Net cash used in investing activities	(652		)	(566		)
Financing activities
Net proceeds from (repayments of) commercial paper borrowings	178			(108		)
Proceeds from long-term borrowings	2			836
Repayments of long-term borrowings	(63		)	(663		)
Proceeds from short-term borrowings	2,710			1,505
Repayments of short-term borrowings	(2,760		)	(1,655		)
Changes in securities lending payable	(14		)	158
Changes in bank overdrafts	20			(124		)
Repurchase and retirement of common stock	(294		)	(395		)
Change in collateral and settlements of debt-related derivatives	—			24
Cash dividends	(206		)	(192		)
Proceeds from issuance of common stock under employee stock plans	76			60
Taxes paid through withholding of common stock under employee stock plans	(78		)	(73		)
Net cash used in financing activities	(429		)	(627		)
Effect of foreign exchange rates on cash and cash equivalents	(1		)	—
Change in cash and cash equivalents	548			1,022
Cash and cash equivalents at beginning of period	3,934			3,609
Cash and cash equivalents at end of period	$	4,482		$	4,631

See accompanying notes.

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Anthem, Inc.

Consolidated Statements of Shareholders’ Equity

(Unaudited)

	Common Stock				Additional Paid-in Capital			Retained Earnings			Accumulated Other Comprehensive (Loss) Income			Total Shareholders’ Equity
(In millions)	Number of Shares		Par Value
December 31, 2018 (audited)	257.4		$	3	$	9,536		$	19,988		$	(986	)	$	28,541
Adoption of Accounting Standards Update No. 2016-02 (Note 2)	—		—		—			26			—			26
January 1, 2019	257.4		3		9,536			20,014			(986		)	28,567
Net income	—		—		—			1,551			—			1,551
Other comprehensive income	—		—		—			—			363			363
Repurchase and retirement of common stock	(1.1	)	—		(71		)	(223		)	—			(294		)
Dividends and dividend equivalents	—		—		—			(206		)	—			(206		)
Issuance of common stock under employee stock plans, net of related tax benefits	1.1		—		69			—			—			69
Convertible debenture repurchases and conversions	—		—		(52		)	—			—			(52		)
March 31, 2019	257.4		$	3	$	9,482		$	21,136		$	(623	)	$	29,998
December 31, 2017 (audited)	256.1		$	3	$	8,547		$	18,054		$	(101	)	$	26,503
Adoption of Accounting Standards Update No. 2016-01 (Note 2)	—		—		—			320			(320		)	—
January 1, 2018	256.1		3		8,547			18,374			(421		)	26,503
Net income	—		—		—			1,312			—			1,312
Other comprehensive loss	—		—		—			—			(209		)	(209		)
Repurchase and retirement of common stock	(1.7	)	—		(56		)	(338		)	—			(394		)
Dividends and dividend equivalents	—		—		—			(198		)	—			(198		)
Issuance of common stock under employee stock plans, net of related tax benefits	1.1		—		28			—			—			28
Convertible debenture repurchases and conversions	—		—		(30		)	—			—			(30		)
Adoption of Accounting Standards Update No. 2018-02 (Note 2)	—		—		—			91			(91		)	—
March 31, 2018	255.5		$	3	$	8,489		$	19,241		$	(721	)	$	27,012

See accompanying notes.

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Anthem, Inc.

Notes to Consolidated Financial Statements

(Unaudited)

March 31, 2019

(In Millions, Except Per Share Data or As Otherwise Stated Herein)

1. Organization

References to the terms “we,” “our,” “us” or “Anthem” used throughout these Notes to Consolidated Financial Statements refer to Anthem, Inc., an Indiana corporation, and unless the context otherwise requires, its direct and indirect subsidiaries. References to the “states” include the District of Columbia, unless the context otherwise requires.

We are one of the largest health benefits companies in the United States in terms of medical membership, serving approximately 41medical members through our affiliated health plans as of March 31, 2019. We offer a broad spectrum of network-based managed care plans to Large Group, Small Group, Individual, Medicaid and Medicare markets. Our managed care plans include: Preferred Provider Organizations, or PPOs; Health Maintenance Organizations, or HMOs; Point-of-Service, or POS, plans; traditional indemnity plans and other hybrid plans, including Consumer-Driven Health Plans, or CDHPs; and hospital only and limited benefit products. In addition, we provide a broad array of managed care services to self-funded customers, including claims processing, stop loss insurance, actuarial services, provider network access, medical cost management, disease management, wellness programs and other administrative services. We 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. We also provide services to the federal government in connection with the Federal Employee Program^®.

We are an independent licensee of the Blue Cross and Blue Shield Association, or BCBSA, an association of independent health benefit plans. We serve our members as the Blue Cross licensee for California and as the Blue Cross and Blue Shield, or BCBS, licensee for Colorado, Connecticut, Georgia, Indiana, Kentucky, Maine, Missouri (excluding 30counties in the Kansas City area), Nevada, New Hampshire, New York (in the New York City metropolitan area and upstate New York), Ohio, Virginia (excluding the Northern Virginia suburbs of Washington, D.C.) and Wisconsin. In a majority of these service areas, we do business as Anthem Blue Cross, Anthem Blue Cross and Blue Shield, and Empire Blue Cross Blue Shield or Empire Blue Cross. We also conduct business through arrangements with other BCBS licensees. Through our subsidiaries, we also serve customers in numerous states across the country as America’s 1st Choice, Amerigroup, Aspire Health, CareMore, Freedom Health, HealthLink, HealthSun, Optimum HealthCare, Simply Healthcare, and/or Unicare. We are licensed to conduct insurance operations in all 50 states and the District of Columbia through our subsidiaries.

2. Basis of Presentation and Significant Accounting Policies

Basis of Presentation: The accompanying unaudited consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles, or GAAP, for interim financial reporting. Accordingly, they do not include all of the information and footnotes required by GAAP for annual financial statements. We have omitted certain footnote disclosures that would substantially duplicate the disclosures in our 2018 Annual Report on Form 10-K, unless the information contained in those disclosures materially changed or is required by GAAP. Certain prior year amounts have been reclassified to conform to the current year presentation or adjusted to conform to the current year rounding convention of reporting financial data in whole millions of dollars, except as otherwise noted. In the opinion of management, all adjustments, including normal recurring adjustments, necessary for a fair statement of the consolidated financial statements as of and for the three months ended March 31, 2019 and 2018 have been recorded. The results of operations for the three months ended March 31, 2019 are not necessarily indicative of the results that may be expected for the full year ending December 31, 2019, or any other period. These unaudited consolidated financial statements should be read in conjunction with our audited consolidated financial statements as of and for the year ended December 31, 2018 included in our 2018 Annual Report on Form 10-K.

Certain of our subsidiaries operate outside of the United States and have functional currencies other than the U.S. dollar, or USD. We translate the assets and liabilities of those subsidiaries to USD using the exchange rate in effect at the end of the period. We translate the revenues and expenses of those subsidiaries to USD using the average exchange rates in effect during

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the period. The net effect of these translation adjustments is included in “Foreign currency translation adjustments” in our consolidated statements of comprehensive income.

Cash and Cash Equivalents: We control a number of bank accounts that are used exclusively to hold customer funds for the administration of customer benefits and have cash and cash equivalents on deposit to meet certain regulatory requirements. These amounts totaled $262 and $222 at March 31, 2019 and December 31, 2018, respectively and are included in the cash and cash equivalents line on our consolidated balance sheets.

Leases:We lease office space and certain computer and related equipment under noncancelable operating leases. We determine whether an arrangement is or contains a lease at its inception. We recognize lease liabilities based on the present value of the minimum lease payments not yet paid by using the lease term and discount rate determined at lease commencement. As our leases do not provide an implicit rate, we use our incremental secured borrowing rate commensurate with the underlying lease terms to determine the present value of our lease payments. Our leases may include options to extend or terminate a lease when it is reasonably certain that we will exercise that option. We recognize the operating right-of-use, or ROU, assets at an amount equal to the lease liability adjusted for prepaid or accrued rent, remaining balance of any lease incentives and unamortized initial direct costs.

The operating lease liabilities are reported in other current liabilities and other noncurrent liabilities and the related ROU assets are reported in other noncurrent assets on our consolidated balance sheet. Lease expense for our operating leases is calculated on a straight-line basis over the lease term and is reported in selling, general and administrative expense on our consolidated statements of income. For our office space leases, we account for the lease and non-lease components (such as common area maintenance) as a single lease component. We also do not recognize a lease liability or ROU asset for our office space leases whose lease terms, at commencement, are twelve months or less and that do not include a purchase option or option to extend that we are reasonably certain to exercise.

Revenue Recognition: Premiums for fully-insured contracts are recognized as revenue over the period insurance coverage is provided, and, if applicable, net of amounts recognized for the minimum medical loss ratio rebates or contractual or government-mandated premium stabilization programs. Administrative fees and other revenues include revenue from certain group contracts that provide for the group to be at risk for all, or with supplemental insurance arrangements, a portion of their claims experience. We charge these self-funded groups an administrative fee, which is based on the number of members in a group or the group’s claim experience. Under our self-funded arrangements, revenue is recognized as administrative services are performed, and benefit payments under these programs are excluded from benefit expense. For additional information about our revenues, see Note 2, “Basis of Presentation and Significant Accounting Policies” and Note 19, “Segment Information,” to our audited consolidated financial statements as of and for the year ended December 31, 2018 included in our 2018 Annual Report on Form 10-K. In addition, see Note 15, “Segment Information,” herein for the disaggregation of revenues by segments and products.

For our non-fully-insured contracts, we had no material contract assets, contract liabilities or deferred contract costs recorded on our consolidated balance sheet at March 31, 2019. For the three months ended March 31, 2019, revenue recognized from performance obligations related to prior periods, such as due to changes in transaction price, was not material. For contracts that have an original expected duration of greater than one year, revenue expected to be recognized in future periods related to unfulfilled contractual performance obligations and contracts with variable consideration related to undelivered performance obligations is not material.

Recently Adopted Accounting Guidance: In March 2019, the Financial Accounting Standards Board, or FASB, issued Accounting Standards Update No. 2019-01, Leases (Topic 842): Codification Improvements. In July 2018, the FASB issued Accounting Standards Update No. 2018-11, Leases (Topic 842): Targeted Improvements and Accounting Standards Update No. 2018-10, Codification Improvements to Topic 842, Leases. These updates provide additional clarification, an optional transition method, a practical expedient and implementation guidance on the previously issued Accounting Standards Update No. 2016-02, Leases (Topic 842). Collectively, these updates supersede the lease guidance in Accounting Standards Codification, or ASC, Topic 840 and require lessees to recognize for all leases, with the exception of short-term leases, a lease liability, which is a lessee’s obligation to make lease payments arising from a lease, measured on a discounted basis. Concurrently, lessees are required to recognize an ROU asset, which is an asset that represents the lessee’s right to use, or control the use of, a specified asset for the lease term. We adopted this standard on January 1, 2019 by applying the optional transition method on the adoption date and did not adjust comparative periods. We also elected the package of practical

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expedients permitted, which among other things, allowed us to carry forward the lease classification for our existing leases. In preparation for the adoption of this standard and to enable preparation of the required financial information, we implemented a new lease accounting software solution as well as new internal controls. The adoption of this standard impacted our 2019 opening consolidated balance sheet as we recorded operating lease liabilities of $728 and ROU assets of $637, which equals the lease liabilities net of accrued rent, lease incentives and the carrying amount of ceased-use liabilities previously recorded on our balance sheet under the old guidance. We also recognized a cumulative-effect adjustment of $26 to our opening retained earnings for deferred gains on our previous sale-leaseback transactions. The adoption of this standard did not have an impact on our consolidated statements of income or cash flows.

In August 2018, the FASB issued Accounting Standards Update No. 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement, or ASU 2018-13. The amendments in ASU 2018-13 eliminate, add, and modify certain disclosure requirements for fair value measurements. The amendments are effective for interim and annual periods beginning after December 15, 2019, with early adoption permitted for either the entire ASU or only the provisions that eliminate or modify requirements. We early adopted the provisions that eliminate and modify disclosure requirements, on a retrospective basis, effective in our 2018 Annual Report on Form 10-K. We will adopt the new disclosure requirements, on a prospective basis, effective for our interim and annual reporting periods beginning after December 15, 2019.

In February 2018, the FASB issued Accounting Standards Update No. 2018-02, Income Statement—Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income, or ASU 2018-02. On December 22, 2017, the federal government enacted a tax bill, H.R.1, An act to provide for reconciliation pursuant to titles II and V of the concurrent resolution on the budget for fiscal year 2018, or the Tax Cuts and Jobs Act. The Tax Cuts and Jobs Act contains significant changes to corporate taxation, including, but not limited to, reducing the U.S. federal corporate income tax rate from 35% to 21% and modifying or limiting many business deductions. Current FASB guidance requires adjustments of deferred taxes due to a change in the federal corporate income tax rate to be included in income from operations. As a result, the tax effects of items within accumulated other comprehensive loss did not reflect the appropriate tax rate. The amendments in ASU 2018-02 allow a reclassification from accumulated other comprehensive loss to retained earnings for stranded tax effects resulting from the change in the federal corporate income tax rate. We adopted the amendments in ASU 2018-02 for our interim and annual reporting periods beginning on January 1, 2018 and reclassified $91 of stranded tax effects from accumulated other comprehensive loss to retained earnings on our consolidated balance sheet. The adoption of ASU 2018-02 did not have any impact on our results of operations or cash flows.

In May 2017, the FASB issued Accounting Standards Update No. 2017-09, Compensation - Stock Compensation (Topic 718): Scope of Modification Accounting, or ASU 2017-09. This update provides guidance about which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting in Topic 718. We adopted ASU 2017-09 on January 1, 2018. The guidance has been and will be applied prospectively to awards modified on or after the adoption date. The adoption of ASU 2017-09 did not have any impact on our consolidated financial position, results of operations or cash flows.

In March 2017, the FASB issued Accounting Standards Update No. 2017-08, Receivables - Nonrefundable Fees and Other Costs (Subtopic 310-20): Premium Amortization on Purchased Callable Debt Securities, or ASU 2017-08. This update changes the amortization period for certain purchased callable debt securities held at a premium by shortening the amortization period for the premium to the earliest call date. Under current guidance, the premium is generally amortized over the contractual life of the instrument. The amendments are to be applied on a modified retrospective basis through a cumulative-effect adjustment directly to retained earnings as of the beginning of the period of adoption. We adopted ASU 2017-08 on January 1, 2019, and the adoption of this standard did not have a material impact on our beginning retained earnings or on our consolidated financial position, results of operations or cash flows.

In March 2017, the FASB issued Accounting Standards Update No. 2017-07, Compensation - Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost, or ASU 2017-07. This amendment requires entities to disaggregate the service cost component from the other components of the benefit cost and present the service cost component in the same income statement line item as other employee compensation costs arising from services rendered by the pertinent employees during the period. The other components of net benefit cost are required to be presented in the income statement separately from the service cost component and outside a subtotal of income from operations. Certain of our defined benefit plans have previously been frozen, resulting in no annual service

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costs, and the remaining service costs for our non-frozen plan are not material. We adopted ASU 2017-07 on January 1, 2018, and it did not have a material impact on our results of operations, cash flows or consolidated financial position.

In December 2016, the FASB issued Accounting Standards Update No. 2016-20, Technical Corrections and Improvements to Topic 606, Revenue from Contracts with Customers. In May 2016, the FASB issued Accounting Standards Update No. 2016-12, Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients. In April 2016, the FASB issued Accounting Standards Update No. 2016-10, Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing. In March 2016, the FASB issued Accounting Standards Update No. 2016-08, Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross verses Net). These updates provide additional clarification and implementation guidance on the previously issued Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers (Topic 606). Collectively, these updates require a company to recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. These updates supersede almost all existing revenue recognition guidance under GAAP, with certain exceptions, including an exception for our premium revenues, which are recorded on the Premiums line item on our consolidated statements of income and will continue to be accounted for in accordance with the provisions of ASC Topic 944, Financial Services - Insurance. Our administrative service and other contracts that are subject to these Accounting Standards Updates are recorded in the Administrative fees and other revenue line item on our consolidated statements of income and represents approximately 6% of our consolidated total operating revenue. We adopted these standards on January 1, 2018 using the modified retrospective approach. The adoption of these standards did not have a material impact on our beginning retained earnings, results of operations, cash flows or consolidated financial position.

In November 2016, the FASB issued Accounting Standards Update No. 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash, or ASU 2016-18. This update amends ASC Topic 230, Statement of Cash Flow, to add and clarify guidance on the classification and presentation of restricted cash in the statement of cash flows. The guidance requires entities to show the changes in the total of cash, cash equivalents, restricted cash and restricted cash equivalents in the statement of cash flows. We adopted ASU 2016-18 on January 1, 2018 using a retrospective approach. The adoption of ASU 2016-18 did not have a material impact on our consolidated statements of cash flows and did not impact our results of operations or consolidated financial position.

In August 2016, the FASB issued Accounting Standards Update No. 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments, or ASU 2016-15. This update addresses the presentation and classification on the statement of cash flows for eight specific items, with the objective of reducing existing diversity in practice in how certain cash receipts and cash payments are presented and classified. We adopted ASU 2016-15 on January 1, 2018. The adoption of ASU 2016-15 did not have a material impact on our consolidated statements of cash flows, results of operations or consolidated financial position.

In January 2016, the FASB issued Accounting Standards Update No. 2016-01, Financial Instruments - Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities, or ASU 2016-01. The amendments in ASU 2016-01 change the accounting for non-consolidated equity investments that are not accounted for under the equity method of accounting by requiring changes in fair value to be recognized in income. Additionally, ASU 2016-01 simplifies the impairment assessment of equity investments without readily determinable fair values; requires entities to use the exit price when estimating the fair value of financial instruments; and modifies various presentation disclosure requirements for financial instruments. We adopted ASU 2016-01 on January 1, 2018 as a cumulative-effect adjustment and reclassified $320 of unrealized gains on equity investments, net of tax, from accumulated other comprehensive loss to retained earnings on our consolidated balance sheet. Effective January 1, 2018, our results of operations include the changes in fair value of these financial instruments.

Recent Accounting Guidance Not Yet Adopted: In November 2018, the FASB issued Accounting Standards Update No. 2018-19, Codification Improvements to Topic 326, Financial Instruments - Credit Losses, or ASU 2018-19. The amendments in ASU 2018-19 provide additional clarification and implementation guidance on certain aspects of the previously issued Accounting Standards Update No. 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, or ASU 2016-13, and have the same effective date and transition requirements as ASU 2016-13. ASU 2016-13 introduces a current expected credit loss model for measuring expected credit losses for certain types of financial instruments held at the reporting date based on historical experience, current conditions and reasonable

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supportable forecasts. ASU 2016-13 replaces the current incurred loss model for measuring expected credit losses, requires expected losses on available-for-sale debt securities to be recognized through an allowance for credit losses rather than as reductions in the amortized cost of the securities and provides for additional disclosure requirements. ASU 2016-13 is effective for us on January 1, 2020, with early adoption permitted. We are currently evaluating the effects the adoption of ASU 2016-13 will have on our consolidated financial statements, results of operations and cash flows.

In August 2018, the FASB issued Accounting Standards Update No. 2018-15, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Customer's Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement that is a Service Contract, or ASU 2018-15. The amendments in ASU 2018-15 require implementation costs incurred by customers in cloud computing arrangements to be deferred and recognized over the term of the arrangement, if those costs would be capitalized by the customer in a software licensing arrangement under the internal-use software guidance. The amendments also require an entity to disclose the nature of its hosting arrangements and adhere to certain presentation requirements in its balance sheet, income statement and statement of cash flows. ASU 2018-15 is effective for us on January 1, 2020, with early adoption permitted. The guidance can be applied either prospectively to all implementation costs incurred after the date of adoption or retrospectively. We are currently evaluating the effects the adoption of ASU 2018-15 will have on our consolidated financial position, results of operations and cash flows.

In August 2018, the FASB issued Accounting Standards Update No. 2018-14, Compensation—Retirement Benefits - Defined Benefit Plans—General (Subtopic 715-20): Disclosure Framework—Changes to the Disclosure Requirements for Defined Benefit Plans, or ASU 2018-14. The amendments in ASU 2018-14 eliminate, add, and modify certain disclosure requirements for employers that sponsor defined benefit pension or other postretirement plans. The amendments are effective for our annual reporting periods beginning after December 15, 2020, with early adoption permitted. The guidance is to be applied on a retrospective basis to all periods presented. We are currently evaluating the effects the adoption of ASU 2018-14 will have on our disclosures.

In August 2018, the FASB issued Accounting Standards Update No. 2018-12, Financial Services—Insurance (Topic 944): Targeted Improvements to the Accounting for Long-Duration Contracts, or ASU 2018-12. The amendments in ASU 2018-12 make changes to a variety of areas to simplify or improve the existing recognition, measurement, presentation and disclosure requirements for long-duration contracts issued by an insurance entity. The amendments require insurers to annually review the assumptions they make about their policyholders and update the liabilities for future policy benefits if the assumptions change. The amendments also simplify the amortization of deferred contract acquisition costs and add new disclosure requirements about the assumptions insurers use to measure their liabilities and how they may affect future cash flows. The amendments in ASU 2018-12 will be effective for our interim and annual reporting periods beginning after December 15, 2020. The amendments related to the liability for future policy benefits for traditional and limited-payment contracts and deferred acquisition costs are to be applied to contracts in force as of the beginning of the earliest period presented, with an option to apply such amendments retrospectively with a cumulative-effect adjustment to the opening balance of retained earnings as of the earliest period presented. The amendments for market risk benefits are to be applied retrospectively. We are currently evaluating the effects the adoption of ASU 2018-12 will have on our consolidated financial position, results of operations, cash flows, and related disclosures.

In January 2017, the FASB issued Accounting Standards Update No. 2017-04, Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment, or ASU 2017-04. This update removes Step 2 of the goodwill impairment test under current guidance, which requires a hypothetical purchase price allocation. The new guidance requires an impairment charge to be recognized for the amount by which the carrying amount exceeds the reporting unit's fair value. Upon adoption, the guidance is to be applied prospectively. ASU 2017-04 is effective for us on January 1, 2020, with early adoption permitted. The adoption of ASU 2017-04 is not expected to have a material impact on our consolidated financial position, results of operations or cash flows.

There were no other new accounting pronouncements that were issued or became effective since the issuance of our 2018 Annual Report on Form 10-K that had, or are expected to have, a material impact on our consolidated financial position, results of operations or cash flows.

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3. Business Acquisitions

Acquisition of America’s 1st Choice

On February 15, 2018, we completed our acquisition of Freedom Health, Inc., Optimum HealthCare, Inc., America’s 1st Choice of South Carolina, Inc. and related entities, or collectively, America’s 1st Choice, a Medicare Advantage organization that offers HMO products, including Chronic Special Needs Plans and Dual-Eligible Special Needs Plans under its Freedom Health and Optimum HealthCare brands in Florida and its America’s 1st Choice of South Carolina brand in South Carolina. At the time of acquisition, through its Medicare Advantage plans, America’s 1st Choice served approximately one hundred and thirty-five thousand members in twenty-five Florida and three South Carolina counties. This acquisition aligns with our plans for continued growth in the Medicare Advantage and Special Needs populations.

In accordance with FASB accounting guidance for business combinations, the consideration transferred was allocated to the fair value of America’s 1st Choice’s assets acquired and liabilities assumed, including identifiable intangible assets. The excess of the consideration transferred over the fair value of net assets acquired resulted in goodwill of $1,029 at March 31, 2019, of which $296 was tax deductible. All of the goodwill was allocated to our Government Business segment. Goodwill recognized from the acquisition of America’s 1st Choice primarily relates to the future economic benefits arising from the assets acquired and is consistent with our stated intentions to strengthen our position and expand operations in the government sector to service Medicare Advantage and Special Needs populations.

The fair value of the net assets acquired from America’s 1st Choice includes $711 of other intangible assets at March 31, 2019, which primarily consist of finite-lived customer relationships with amortization periods ranging from 9 to 13 years. The results of operations of America’s 1st Choice are included in our consolidated financial statements within our Government Business segment for the periods following February 15, 2018. The pro forma effects of this acquisition for prior periods were not material to our consolidated results of operations.

4. Investments

Fixed Maturity Securities

We evaluate our available-for-sale fixed maturity securities for other-than-temporary declines based on qualitative and quantitative factors. There were no individually significant other-than-temporary impairment losses on investments during the three months ended March 31, 2019 and 2018. We continue to review our investment portfolios under our impairment review policy. Given the inherent uncertainty of changes in market conditions and the significant judgments involved, there is a continuing risk that further declines in fair value may occur and additional material other-than-temporary impairment, or OTTI, losses on investments may be recorded in future periods.

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A summary of current and long-term fixed maturity securities, available-for-sale, at March 31, 2019 and December 31, 2018 is as follows:

													Non-Credit Component of OTTIs Recognized in Accumulated Other Comprehensive Loss
	Cost or Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses						Estimated Fair Value
					Less than 12 Months			12 Months or Greater
March 31, 2019
Fixed maturity securities:
United States Government securities	$	388	$	6	$	—		$	(1	)	$	393	$	—
Government sponsored securities	139		2		—			(1		)	140		—
States, municipalities and political subdivisions, tax-exempt	4,523		173		—			(3		)	4,693		—
Corporate securities	8,594		132		(24		)	(60		)	8,642		(3		)
Residential mortgage-backed securities	3,034		48		(1		)	(24		)	3,057		—
Commercial mortgage-backed securities	79		1		—			(1		)	79		—
Other securities	1,275		17		(3		)	(6		)	1,283		—
Total fixed maturity securities	$	18,032	$	379	$	(28	)	$	(96	)	$	18,287	$	(3	)
December 31, 2018
Fixed maturity securities:
United States Government securities	$	414	$	3	$	—		$	(1	)	$	416	$	—
Government sponsored securities	108		1		—			(1		)	108		—
States, municipalities and political subdivisions, tax-exempt	4,716		91		(3		)	(19		)	4,785		—
Corporate securities	8,189		33		(170		)	(115		)	7,937		(3		)
Residential mortgage-backed securities	2,769		31		(3		)	(47		)	2,750		—
Commercial mortgage-backed securities	69		—		—			(2		)	67		—
Other securities	1,115		14		(8		)	(5		)	1,116		—
Total fixed maturity securities	$	17,380	$	173	$	(184	)	$	(190	)	$	17,179	$	(3	)

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For fixed maturity securities in an unrealized loss position at March 31, 2019 and December 31, 2018, the following table summarizes the aggregate fair values and gross unrealized losses by length of time those securities have continuously been in an unrealized loss position:

	Less than 12 Months						12 Months or Greater
(Securities are whole amounts)	Number of Securities	Estimated Fair Value		Gross Unrealized Loss			Number of Securities	Estimated Fair Value		Gross Unrealized Loss
March 31, 2019
Fixed maturity securities:
United States Government securities	8	$	39	$	—		16	$	65	$	(1	)
Government sponsored securities	7	6		—			28	29		(1		)
States, municipalities and political subdivisions, tax-exempt	13	17		—			199	288		(3		)
Corporate securities	586	1,068		(24		)	1,295	2,273		(60		)
Residential mortgage-backed securities	87	157		(1		)	764	1,372		(24		)
Commercial mortgage-backed securities	—	—		—			12	23		(1		)
Other securities	125	413		(3		)	142	368		(6		)
Total fixed maturity securities	826	$	1,700	$	(28	)	2,456	$	4,418	$	(96	)
December 31, 2018
Fixed maturity securities:
United States Government securities	5	$	47	$	—		25	$	79	$	(1	)
Government sponsored securities	8	11		—			24	31		(1		)
States, municipalities and political subdivisions, tax-exempt	177	295		(3		)	604	1,032		(19		)
Corporate securities	2,185	4,503		(170		)	1,220	2,072		(115		)
Residential mortgage-backed securities	259	383		(3		)	816	1,458		(47		)
Commercial mortgage-backed securities	6	11		—			19	37		(2		)
Other securities	193	599		(8		)	93	237		(5		)
Total fixed maturity securities	2,833	$	5,849	$	(184	)	2,801	$	4,946	$	(190	)

The amortized cost and fair value of fixed maturity securities at March 31, 2019, by contractual maturity, are shown below. Expected maturities may differ from contractual maturities because the issuers of the securities may have the right to prepay obligations.

	Amortized Cost		Estimated Fair Value
Due in one year or less	$	541	$	542
Due after one year through five years	5,431		5,466
Due after five years through ten years	5,068		5,153
Due after ten years	3,879		3,990
Mortgage-backed securities	3,113		3,136
Total fixed maturity securities	$	18,032	$	18,287

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Proceeds from sales, maturities, calls or redemptions of fixed maturity securities and the related gross realized gains and gross realized losses for the three months ended March 31, 2019 and 2018 are as follows:

	Three Months Ended   March 31
	2019			2018
Proceeds	$	1,468		$	2,227
Gross realized gains	18			30
Gross realized losses	(17		)	(36		)

In the ordinary course of business, we may sell securities at a loss for a number of reasons, including, but not limited to: (i) changes in the investment environment; (ii) expectation that the fair value could deteriorate further; (iii) desire to reduce exposure to an issuer or an industry; (iv) changes in credit quality; or (v) changes in expected cash flow.

All securities sold resulting in investment gains and losses are recorded on the trade date. Realized gains and losses are determined on the basis of the cost or amortized cost of the specific securities sold.

Equity Securities

A summary of current and long-term marketable equity securities at March 31, 2019 and December 31, 2018 is as follows:

	March 31, 2019		December 31, 2018
Equity securities:
Exchange traded funds	$	2	$	2
Fixed maturity mutual funds	589		557
Common equity securities	356		654
Private equity securities	297		313
Total	$	1,244	$	1,526

The gains and losses related to equity securities for the three months ended March 31, 2019 and 2018 are as follows:

	Three Months Ended   March 31
	2019			2018
Net realized gains (losses) recognized on equity securities	$	79		$	(43	)
Less: Net realized gains recognized on equity securities sold during the period	(21		)	(173		)
Unrealized gains (losses) recognized on equity securities still held at March 31, 2019	$	58		$	(216	)

Securities Lending Programs

We participate in securities lending programs whereby marketable securities in our investment portfolio are transferred to independent brokers or dealers in exchange for cash and securities collateral. The fair value of the collateral received at the time of the transactions amounted to $590 and $604 at March 31, 2019 and December 31, 2018, respectively. The value of the collateral represented 103% and 102% of the market value of the securities on loan at March 31, 2019 and December 31, 2018, respectively. We recognize the collateral as an asset under the caption “Securities lending collateral” on our consolidated balance sheets and we recognize a corresponding liability for the obligation to return the collateral to the borrower under the caption “Securities lending payable.” The securities on loan are reported in the applicable investment category on our consolidated balance sheets.

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The remaining contractual maturity of our securities lending agreements at March 31, 2019 is as follows:

	Overnight and Continuous
Securities lending transactions
United States Government securities	$	25
Corporate securities	545
Equity securities	20
Total	$	590

The market value of loaned securities and that of the collateral pledged can fluctuate in non-synchronized fashions. To the extent the loaned securities' value appreciates faster or depreciates slower than the value of the collateral pledged, we are exposed to the risk of the shortfall. As a primary mitigating mechanism, the loaned securities and collateral pledged are marked to market on a daily basis and the shortfall, if any, is collected accordingly. Secondarily, the minimum collateral level is set at 102% of the value of the loaned securities, which provides a cushion before any shortfall arises. The investment of the cash collateral is subject to market risk, which is managed by limiting the investments to higher quality and shorter duration instruments.

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5. Derivative Financial Instruments

We primarily invest in the following types of derivative financial instruments: interest rate swaps, futures, forward contracts, put and call options, swaptions, embedded derivatives and warrants. We also enter into master netting agreements which reduce credit risk by permitting net settlement of transactions.

We have entered into various interest rate swap contracts to convert a portion of our interest rate exposure on our long-term debt from fixed rates to floating rates. The floating rates payable on all of our fair value hedges are benchmarked to the London Interbank Offering Rate, or LIBOR.

Prior to 2019, we entered into a series of forward starting pay fixed interest rate swaps with the objective of reducing the variability of cash flows in the interest payments on anticipated future financings. The unrecognized loss for all expired and terminated cash flow hedges included in accumulated other comprehensive loss, net of tax, was $243 and $246 at March 31, 2019 and December 31, 2018, respectively.

For additional information relating to the fair value of our derivative assets and liabilities, see Note 6, “Fair Value,” of this Form 10-Q.

6. Fair Value

Assets and liabilities recorded at fair value in our consolidated balance sheets are categorized based upon the level of judgment associated with the inputs used to measure their fair value. Level inputs, as defined by FASB guidance for fair value measurements and disclosures, are as follows:

Level Input	Input Definition
Level I	Inputs are unadjusted, quoted prices for identical assets or liabilities in active markets at the measurement date.
Level II	Inputs other than quoted prices included in Level I that are observable for the asset or liability through corroboration with market data at the measurement date.
Level III	Unobservable inputs that reflect management’s best estimate of what market participants would use in pricing the asset or liability at the measurement date.

The following methods, assumptions and inputs were used to determine the fair value of each class of the following assets and liabilities recorded at fair value in our consolidated balance sheets:

Cash equivalents: Cash equivalents primarily consist of highly rated money market funds with maturities of three months or less and are purchased daily at par value with specified yield rates. Due to the high ratings and short-term nature of the funds, we designate all cash equivalents as Level I.

Fixed maturity securities, available-for-sale: Fair values of available-for-sale fixed maturity securities are based on quoted market prices, where available. These fair values are obtained primarily from third party pricing services, which generally use Level I or Level II inputs for the determination of fair value to facilitate fair value measurements and disclosures. Level II securities primarily include United States Government securities, corporate securities, securities from states, municipalities and political subdivisions, mortgage-backed securities and certain other asset-backed securities. For securities not actively traded, the pricing services may use quoted market prices of comparable instruments or discounted cash flow analyses, incorporating inputs that are currently observable in the markets for similar securities. We have controls in place to review the pricing services’ qualifications and procedures used to determine fair values. In addition, we periodically review the pricing services’ pricing methodologies, data sources and pricing inputs to ensure the fair values obtained are reasonable. Inputs that are often used in the valuation methodologies include, but are not limited to, broker quotes, benchmark yields, credit spreads, default rates and prepayment speeds. We also have certain fixed maturity securities, primarily corporate debt securities, which are designated Level III securities. For these securities, the valuation methodologies may incorporate broker quotes or discounted cash flow analyses using assumptions for inputs such as expected cash flows, benchmark yields, credit spreads, default rates and prepayment speeds that are not observable in the markets.

Equity securities: Fair values of equity securities are generally designated as Level I and are based on quoted market prices. For certain equity securities, quoted market prices for the identical security are not always available and the fair value is estimated by reference to similar securities for which quoted prices are available. These securities are designated Level II.

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We also have certain equity securities, including private equity securities, for which the fair value is estimated based on each security’s current condition and future cash flow projections. Such securities are designated Level III. The fair values of these private equity securities are generally based on either broker quotes or discounted cash flow projections using assumptions for inputs such as the weighted-average cost of capital, long-term revenue growth rates and earnings before interest, taxes, depreciation and amortization, and/or revenue multiples that are not observable in the markets.

Other invested assets, current: Other invested assets, current include securities held in rabbi trusts that are classified as trading. These securities are designated Level I securities, as fair values are based on quoted market prices.

Securities lending collateral: Fair values of securities lending collateral are based on quoted market prices, where available. These fair values are obtained primarily from third party pricing services, which generally use Level I or Level II inputs for the determination of fair value, to facilitate fair value measurements and disclosures.

Derivatives: Fair values are based on the quoted market prices by the financial institution that is the counterparty to the derivative transaction. We independently verify prices provided by the counterparties using valuation models that incorporate observable market inputs for similar derivative transactions. Derivatives are designated as Level II securities. Derivatives presented within the fair value hierarchy table below are presented on a gross basis and not on a master netting basis by counterparty.

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A summary of fair value measurements by level for assets and liabilities measured at fair value on a recurring basis at March 31, 2019 and December 31, 2018 is as follows:

	Level I		Level II			Level III		Total
March 31, 2019
Assets:
Cash equivalents	$	2,551	$	—		$	—	$	2,551
Fixed maturity securities, available-for-sale:
United States Government securities	—		393			—		393
Government sponsored securities	—		140			—		140
States, municipalities and political subdivisions, tax-exempt	—		4,693			—		4,693
Corporate securities	—		8,345			297		8,642
Residential mortgage-backed securities	—		3,051			6		3,057
Commercial mortgage-backed securities	—		79			—		79
Other securities	—		1,269			14		1,283
Total fixed maturity securities, available-for-sale	—		17,970			317		18,287
Equity securities:
Exchange traded funds	2		—			—		2
Fixed maturity mutual funds	—		589			—		589
Common equity securities	315		41			—		356
Private equity securities	—		—			297		297
Total equity securities	317		630			297		1,244
Other invested assets, current	20		—			—		20
Securities lending collateral	—		591			—		591
Derivatives	—		15			—		15
Total assets	$	2,888	$	19,206		$	614	$	22,708
Liabilities:
Derivatives	$	—	$	(12	)	$	—	$	(12	)
Total liabilities	$	—	$	(12	)	$	—	$	(12	)
December 31, 2018
Assets:
Cash equivalents	$	1,815	$	—		$	—	$	1,815
Fixed maturity securities, available-for-sale:
United States Government securities	—		416			—		416
Government sponsored securities	—		108			—		108
States, municipalities and political subdivisions, tax-exempt	—		4,785			—		4,785
Corporate securities	2		7,648			287		7,937
Residential mortgage-backed securities	—		2,744			6		2,750
Commercial mortgage-backed securities	—		67			—		67
Other securities	—		1,099			17		1,116
Total fixed maturity securities, available-for-sale	2		16,867			310		17,179
Equity securities:
Exchange traded funds	2		—			—		2
Fixed maturity mutual funds	—		557			—		557
Common equity securities	601		53			—		654
Private equity securities	—		—			313		313
Total equity securities	603		610			313		1,526
Other invested assets, current	21		—			—		21
Securities lending collateral	314		290			—		604
Derivatives	—		16			—		16
Total assets	$	2,755	$	17,783		$	623	$	21,161
Liabilities:
Derivatives	$	—	$	(17	)	$	—	$	(17	)
Total liabilities	$	—	$	(17	)	$	—	$	(17	)

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A reconciliation of the beginning and ending balances of assets measured at fair value on a recurring basis using Level III inputs for the three months ended March 31, 2019 and 2018 is as follows:

	Corporate Securities			Residential Mortgage- backed Securities		Other  Securities			Equity Securities			Total
Three Months Ended March 31, 2019
Beginning balance at January 1, 2019	$	287		$	6	$	17		$	313		$	623
Total (losses) gains:
Recognized in net income	(1		)	—		—			(2		)	(3		)
Recognized in accumulated other comprehensive loss	2			—		—			—			2
Purchases	33			—		2			7			42
Sales	(1		)	—		—			(21		)	(22		)
Settlements	(21		)	—		(1		)	—			(22		)
Transfers into Level III	—			—		3			—			3
Transfers out of Level III	(2		)	—		(7		)	—			(9		)
Ending balance at March 31, 2019	$	297		$	6	$	14		$	297		$	614
Change in unrealized losses included in net income related to assets still held at March 31, 2019	$	—		$	—	$	—		$	(2	)	$	(2	)
Three Months Ended March 31, 2018
Beginning balance at January 1, 2018	$	229		$	5	$	16		$	287		$	537
Total losses recognized in net income	—			—		—			(239		)	(239		)
Purchases	20			—		—			256			276
Sales	(4		)	—		—			(1		)	(5		)
Settlements	(6		)	—		(1		)	—			(7		)
Transfers into Level III	21			—		—			—			21
Transfers out of Level III	—			—		(1		)	—			(1		)
Ending balance at March 31, 2018	$	260		$	5	$	14		$	303		$	582
Change in unrealized losses included in net income related to assets still held at March 31, 2018	$	(1	)	$	—	$	—		$	—		$	(1	)

There were no individually material transfers into or out of Level III during the three months ended March 31, 2019 or 2018.

Certain assets and liabilities are measured at fair value on a nonrecurring basis; that is, the instruments are not measured at fair value on an ongoing basis but are subject to fair value adjustments only in certain circumstances. As disclosed in Note 3, “Business Acquisitions,” we completed our acquisition of America's 1st Choice on February 15, 2018. The net assets acquired in our acquisition of America's 1st Choice and resulting goodwill and other intangible assets were recorded at fair value primarily using Level III inputs. The majority of America's 1st Choice's assets acquired and liabilities assumed were recorded at their carrying values as of the respective date of acquisition, as their carrying values approximated their fair values due to their short-term nature. The fair values of goodwill and other intangible assets acquired in our acquisition of America's 1st Choice were internally estimated based on the income approach. The income approach estimates fair value based on the present value of the cash flows that the assets could be expected to generate in the future. We developed internal estimates for the expected cash flows and discount rate in the present value calculation. Other than the assets acquired and liabilities assumed in our acquisition of America's 1st Choice described above, there were no material assets or liabilities measured at fair value on a nonrecurring basis during the three months ended March 31, 2019 or 2018.

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Our valuation policy is determined by members of our treasury and accounting departments. Whenever possible, our policy is to obtain quoted market prices in active markets to estimate fair values for recognition and disclosure purposes. Where quoted market prices in active markets are not available, fair values are estimated using discounted cash flow analyses, broker quotes or other valuation techniques. These techniques are significantly affected by our assumptions, including discount rates and estimates of future cash flows. Potential taxes and other transaction costs are not considered in estimating fair values. Our valuation policy is generally to obtain quoted prices for each security from third party pricing services, which are derived through recently reported trades for identical or similar securities making adjustments through the reporting date based upon available market observable information. As we are responsible for the determination of fair value, we perform a monthly analysis on the prices received from the pricing services to determine whether the prices are reasonable estimates of fair value. This analysis is performed by our internal treasury personnel who are familiar with our investment portfolios, the pricing services engaged and the valuation techniques and inputs used. Our analysis includes procedures such as a review of month-to-month price fluctuations and price comparisons to secondary pricing services. There were no adjustments to quoted market prices obtained from the pricing services during the three months ended March 31, 2019 or 2018.

In addition to the preceding disclosures on assets recorded at fair value in the consolidated balance sheets, FASB guidance also requires the disclosure of fair values for certain other financial instruments for which it is practicable to estimate fair value, whether or not such values are recognized in our consolidated balance sheets.

Non-financial instruments such as real estate, property and equipment, other current assets, deferred income taxes, intangible assets and certain financial instruments, such as policy liabilities, are excluded from the fair value disclosures. Therefore, the fair value amounts cannot be aggregated to determine our underlying economic value.

The carrying amounts reported in our consolidated balance sheets for cash, accrued investment income, premium receivables, self-funded receivables, other receivables, income taxes receivable/payable, unearned income, accounts payable and accrued expenses, security trades pending payable, securities lending payable and certain other current liabilities approximate fair value because of the short term nature of these items. These assets and liabilities are not listed in the table below.

The following methods and assumptions were used to estimate the fair value of each class of financial instrument that is recorded at its carrying value in our consolidated balance sheets:

Other invested assets, long-term: Other invested assets, long-term include primarily our investments in limited partnerships, joint ventures and other non-controlled corporations, as well as the cash surrender value of corporate-owned life insurance policies. Investments in limited partnerships, joint ventures and other non-controlled corporations are carried at our share in the entities’ undistributed earnings, which approximates fair value. The carrying value of corporate-owned life insurance policies represents the cash surrender value as reported by the respective insurer, which approximates fair value.

Short-term borrowings: The fair value of our short-term borrowings is based on quoted market prices for the same or similar debt, or, if no quoted market prices were available, on the current market interest rates estimated to be available to us for debt of similar terms and remaining maturities.

Long-term debt – commercial paper: The carrying amount for commercial paper approximates fair value, as the underlying instruments have variable interest rates at market value.

Long-term debt – senior unsecured notes and surplus notes: The fair values of our notes are based on quoted market prices in active markets for the same or similar debt, or, if no quoted market prices are available, on the current market observable rates estimated to be available to us for debt of similar terms and remaining maturities.

Long-term debt – convertible debentures: The fair value of our convertible debentures is based on the quoted market price in the active private market in which the convertible debentures trade.

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A summary of the estimated fair values by level of each class of financial instrument that is recorded at its carrying value on our consolidated balance sheets at March 31, 2019 and December 31, 2018 is as follows:

	Carrying Value		Estimated Fair Value
			Level I		Level II		Level III		Total
March 31, 2019
Assets:
Other invested assets, long-term	$	3,710	$	—	$	—	$	3,710	$	3,710
Liabilities:
Debt:
Short-term borrowings	1,095		—		1,095		—		1,095
Commercial paper	875		—		875		—		875
Notes	17,191		—		17,752		—		17,752
Convertible debentures	181		—		1,071		—		1,071
December 31, 2018
Assets:
Other invested assets, long-term	$	3,726	$	—	$	—	$	3,726	$	3,726
Liabilities:
Debt:
Short-term borrowings	1,145		—		1,145		—		1,145
Commercial paper	697		—		697		—		697
Notes	17,178		—		17,145		—		17,145
Convertible debentures	191		—		1,030		—		1,030

7. Income Taxes

During the three months ended March 31, 2019 and 2018, we recognized income tax expense of $394 and $468, respectively, which represent effective tax rates of 20.3% and 26.3%, respectively. The decrease in income tax expense and effective tax rate was primarily due to the suspension of the non-tax deductible Health Insurance Provider Fee, or HIP Fee, for 2019, which resulted in a decrease of income tax expense of $83.

8. Retirement Benefits

The components of net periodic benefit credit included in our consolidated statements of income for the three months ended March 31, 2019 and 2018 are as follows:

	Pension Benefits						Other Benefits
	Three Months Ended   March 31						Three Months Ended   March 31
	2019			2018			2019			2018
Service cost	$	—		$	2		$	—		$	—
Interest cost	16			14			4			4
Expected return on assets	(34		)	(37		)	(5		)	(6		)
Recognized actuarial loss	4			6			—			1
Settlement loss	2			6			—			—
Amortization of prior service credit	—			—			(3		)	(3		)
Net periodic benefit credit	$	(12	)	$	(9	)	$	(4	)	$	(4	)

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For the year ending December 31, 2019, no material contributions are expected to be necessary to meet the Employee Retirement Income Security Act of 1974, as amended, or ERISA, required funding levels; however, we may elect to make discretionary contributions up to the maximum amount deductible for income tax purposes. No contributions were made to our retirement benefit plans during the three months ended March 31, 2019 and 2018.

9.Medical Claims Payable

A reconciliation of the beginning and ending balances for medical claims payable, by segment (see Note 15, “Segment Information”), for the three months ended March 31, 2019 is as follows:

	Commercial & Specialty Business			Government Business			Total
Gross medical claims payable, beginning of period	$	2,586		$	4,680		$	7,266
Ceded medical claims payable, beginning of period	(10		)	(24		)	(34		)
Net medical claims payable, beginning of period	2,576			4,656			7,232
Net incurred medical claims:
Current period	5,695			13,099			18,794
Prior periods redundancies	(197		)	(258		)	(455		)
Total net incurred medical claims	5,498			12,841			18,339
Net payments attributable to:
Current period medical claims	3,540			8,623			12,163
Prior periods medical claims	1,766			3,648			5,414
Total net payments	5,306			12,271			17,577
Net medical claims payable, end of period	2,768			5,226			7,994
Ceded medical claims payable, end of period	8			26			34
Gross medical claims payable, end of period	$	2,776		$	5,252		$	8,028

At March 31, 2019, the total of net incurred but not reported liabilities plus expected development on reported claims for the Commercial & Specialty Business was $87, $526 and $2,155 for the claim years 2017 and prior, 2018 and 2019, respectively.

At March 31, 2019, the total of net incurred but not reported liabilities plus expected development on reported claims for the Government Business was $51, $699 and $4,476 for the claim years 2017 and prior, 2018 and 2019, respectively.

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A reconciliation of the beginning and ending balances for medical claims payable, by segment (see Note 15, “Segment Information”), for the three months ended March 31, 2018 is as follows:

	Commercial & Specialty Business			Government Business			Total
Gross medical claims payable, beginning of period	$	3,383		$	4,431		$	7,814
Ceded medical claims payable, beginning of period	(78		)	(27		)	(105		)
Net medical claims payable, beginning of period	3,305			4,404			7,709
Business combinations and purchase adjustments	—			199			199
Net incurred medical claims:
Current period	5,745			11,092			16,837
Prior periods redundancies	(335		)	(298		)	(633		)
Total net incurred medical claims	5,410			10,794			16,204
Net payments attributable to:
Current period medical claims	3,739			7,465			11,204
Prior periods medical claims	2,204			3,285			5,489
Total net payments	5,943			10,750			16,693
Net medical claims payable, end of period	2,772			4,647			7,419
Ceded medical claims payable, end of period	2			32			34
Gross medical claims payable, end of period	$	2,774		$	4,679		$	7,453

The reconciliation of net incurred medical claims to benefit expense included in our consolidated statements of income is as follows:

	Three Months Ended   March 31
	2019		2018
Net incurred medical claims:
Commercial & Specialty Business	$	5,498	$	5,410
Government Business	12,841		10,794
Total net incurred medical claims	18,339		16,204
Quality improvement and other claims expense	943		842
Benefit expense	$	19,282	$	17,046

The reconciliation of the medical claims payable reflected in the tables above, to the consolidated ending balance for medical claims payable included in the consolidated balance sheet, as of March 31, 2019, is as follows:

	Commercial & Specialty Business		Government Business		Total
Net medical claims payable, end of period	$	2,768	$	5,226	$	7,994
Ceded medical claims payable, end of period	8		26		34
Insurance lines other than short duration	—		214		214
Gross medical claims payable, end of period	$	2,776	$	5,466	$	8,242

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10. Debt

We generally issue senior unsecured notes for long-term borrowing purposes. At March 31, 2019 and December 31, 2018, we had $17,166 and $17,153, respectively, outstanding under these notes.

On May 1, 2018, we settled each of the Equity Units stock purchase contracts at a settlement rate of 0.2412 shares of our common stock, using a market value formula set forth in the Equity Units purchase contracts. This resulted in the issuance of approximately 6 shares. We had issued 25 Equity Units on May 12, 2015, pursuant to an underwriting agreement dated May 6, 2015, in an aggregate principal amount of $1,250. Each Equity Unit had a stated amount of $50 (whole dollars) and consisted of a purchase contract obligating the holder to purchase a certain number of shares of our common stock on May 1, 2018, subject to earlier termination or settlement, for a price in cash of $50 (whole dollars); and a 5% undivided beneficial ownership interest in $1,000 (whole dollars) principal amount of our 1.900% remarketable subordinated notes, or RSNs, due 2028. On March 2, 2018, we remarketed the RSNs and used the proceeds to purchase U.S. Treasury securities that were pledged to secure the stock purchase obligations of the holders of the Equity Units. The purchasers of the RSNs transferred the RSNs to us in exchange for $1,250 principal amount of our 4.101% senior notes due 2028, or the 2028 Notes, and a cash payment of $4. We cancelled the RSNs upon receipt and recognized a loss on extinguishment of debt of $19. At the remarketing, we also issued $850aggregate principal amount of 4.550% notes due 2048, or the 2048 Notes, under our shelf registration statement.We used the proceeds from the 2048 Notes for working capital and general corporate purposes. Interest on the 2028 Notes and the 2048 Notes is payable semi-annually in arrears on March 1 and September 1 of each year, commencing on September 1, 2018.

We have an unsecured surplus note with an outstanding principal balance of $25 at both March 31, 2019 and December 31, 2018.

We have a senior revolving credit facility, or the Facility, with a group of lenders for general corporate purposes. The Facility provides credit up to $3,500 and matures on August 25, 2020. There were no amounts outstanding under the Facility at any time during the three months endedMarch 31, 2019 or at December 31, 2018.

Through certain subsidiaries, we have entered into multiple 364-day lines of credit with separate lenders for general corporate purposes. The facilities provide combined credit up to $600. At March 31, 2019 and December 31, 2018, $400 and $500, respectively were outstanding under our 364-day lines of credit.

We have an authorized commercial paper program of up to $2,500, the proceeds of which may be used for general corporate purposes. At March 31, 2019 and December 31, 2018, we had $875 and $697, respectively, outstanding under this program.

We have outstanding senior unsecured convertible debentures due 2042, or the Debentures, which are governed by an indenture between us and The Bank of New York Mellon Trust Company, N.A., as trustee, or the indenture. We have accounted for the Debentures in accordance with the FASB cash conversion guidance for debt with conversion and other options. As a result, the value of the embedded conversion option (net of deferred taxes and equity issuance costs) has been bifurcated from its debt host and recorded as a component of additional paid-in capital in our consolidated balance sheets. During the three months endedMarch 31, 2019, $17 aggregate principal amount of the Debentures were surrendered for conversion by certain holders in accordance with the terms and provisions of the indenture. We elected to settle the excess of the principal amount of the conversions with cash for total payments of $63. We recognized a gain of $1 on the extinguishment of debt related to the Debentures, based on the fair values of the debt on the conversion settlement dates.

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The following table summarizes at March 31, 2019 the related balances, conversion rate and conversion price of the Debentures:

Outstanding principal amount	$	270
Unamortized debt discount	$	87
Net debt carrying amount	$	181
Equity component carrying amount	$	98
Conversion rate (shares of common stock per $1,000 of principal amount)	13.8707
Effective conversion price (per $1,000 of principal amount)	$	72.0939

We are a member, through certain subsidiaries, of the Federal Home Loan Bank of Indianapolis, the Federal Home Loan Bank of Cincinnati and the Federal Home Loan Bank of Atlanta, or collectively, the FHLBs. As a member we have the ability to obtain short-term cash advances, subject to certain minimum collateral requirements. We had $695 and $645 in outstanding short-term borrowings from FHLBs, at March 31, 2019 and December 31, 2018 with fixed interest rates of 2.563% and 2.458% respectively.

All debt is a direct obligation of Anthem, Inc., except for the surplus note, the FHLB borrowings, and the 364-day lines of credit.

11. Commitments and Contingencies

Litigation and Regulatory Proceedings

In the ordinary course of business, we are defendants in, or parties to, a number of pending or threatened legal actions or proceedings. To the extent a plaintiff or plaintiffs in the following cases have specified in their complaint or in other court filings the amount of damages being sought, we have noted those alleged damages in the descriptions below. With respect to the cases described below, we contest liability and/or the amount of damages in each matter and believe we have meritorious defenses.

Where available information indicates that it is probable that a loss has been incurred as of the date of the consolidated financial statements and we can reasonably estimate the amount of that loss, we accrue the estimated loss by a charge to income. In many proceedings, however, it is difficult to determine whether any loss is probable or reasonably possible. In addition, even where loss is possible or an exposure to loss exists in excess of the liability already accrued with respect to a previously identified loss contingency, it is not always possible to reasonably estimate the amount of the possible loss or range of loss.

With respect to many of the proceedings to which we are a party, we cannot provide an estimate of the possible losses, or the range of possible losses in excess of the amount, if any, accrued, for various reasons, including but not limited to some or all of the following: (i) there are novel or unsettled legal issues presented, (ii) the proceedings are in early stages, (iii) there is uncertainty as to the likelihood of a class being certified or decertified or the ultimate size and scope of the class, (iv) there is uncertainty as to the outcome of pending appeals or motions, (v) there are significant factual issues to be resolved, and/or (vi) in many cases, the plaintiffs have not specified damages in their complaint or in court filings. For those legal proceedings where a loss is probable, or reasonably possible, and for which it is possible to reasonably estimate the amount of the possible loss or range of losses, we currently believe that the range of possible losses, in excess of established reserves is, in the aggregate, from $0 to approximately $250 at March 31, 2019. This estimated aggregate range of reasonably possible losses is based upon currently available information taking into account our best estimate of such losses for which such an estimate can be made.

Blue Cross Blue Shield Antitrust Litigation

We are a defendant in multiple lawsuits that were initially filed in 2012 against the BCBSA and Blue Cross and/or Blue Shield licensees, or Blue plans, across the country. The cases were consolidated into a single multi-district proceeding captioned In re Blue Cross Blue Shield Antitrust Litigation that is pending in the United States District Court for the Northern District of Alabama, or the Court. Generally, the suits allege that the BCBSA and the Blue plans have conspired to

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horizontally allocate geographic markets through license agreements, best efforts rules that limit the percentage of non-Blue revenue of each plan, restrictions on acquisitions rules governing the BlueCard and National Accounts programs and other arrangements in violation of the Sherman Antitrust Act, or Sherman Act, and related state laws. The cases were brought by two putative nationwide classes of plaintiffs, health plan subscribers and providers, and actions filed in Alabama, Arkansas, California, Florida, Hawaii, Illinois, Indiana, Kansas, Kansas City, Louisiana, Michigan, Minnesota, Mississippi, Missouri, Montana, Nebraska, New Hampshire, North Carolina, North Dakota, Oklahoma, Pennsylvania, South Dakota, Rhode Island, South Carolina, Tennessee, Texas, Vermont and Virginia have been consolidated into the multi-district proceeding.

In response to cross motions for partial summary judgment by plaintiffs and defendants, the Court issued an order in April 2018 determining that the defendants’ aggregation of geographic market allocations and output restrictions are to be analyzed under a per se standard of review, and the BlueCard program and other alleged Section 1 Sherman Act violations are to be analyzed under the rule of reason standard of review. The Court also found that there remain genuine issues of material fact as to whether defendants operate as a single entity with regard to the enforcement of the Blue Cross Blue Shield trademarks. In June 2018, in response to a motion filed by the defendants, the Court certified its April order for interlocutory appeal to the United States Court of Appeals for the Eleventh Circuit, or the Eleventh Circuit. Also in June 2018, the defendants filed, with the Eleventh Circuit, a petition for permission to appeal the April order, which the plaintiffs opposed. In December 2018, the Eleventh Circuit denied the petition. No dates have been set for either the final pretrial conferences or trials in these actions. In March 2019, the Court issued a Fourth Amended Scheduling Order requiring that briefing on motions for class certification and related expert reports, merits and damages expert reports, and certain dispositive motions occur in 2019. We intend to vigorously defend these suits; however, their ultimate outcome cannot be presently determined.

Blue Cross of California Taxation Litigation

In July 2013, our California affiliate Blue Cross of California (doing business as Anthem Blue Cross), or BCC, was named as a defendant in a California taxpayer action filed in Los Angeles County Superior Court, captioned Michael D. Myers v. State Board of Equalization, et al. This action was brought under a California statute that permits an individual taxpayer to sue a governmental agency when the taxpayer believes the agency has failed to enforce governing law. Plaintiff contends that BCC, a licensed Health Care Service Plan, or HCSP, is an “insurer” for purposes of taxation despite acknowledging it is not an “insurer” under regulatory law. At the time, under California law, “insurers” were required to pay a gross premiums tax, or GPT, calculated as 2.35% on gross premiums. As a licensed HCSP, BCC has paid the California Corporate Franchise Tax, or CFT, the tax paid by California businesses generally. Plaintiff contends that BCC must pay the GPT rather than the CFT, and seeks a writ of mandate directing the taxing agencies to collect the GPT and an order requiring BCC to pay GPT back taxes, interest, and penalties for the eight-year period prior to the filing of the complaint.

In March 2018, the Superior Court denied BCC’s motion for judgment on the pleadings and similar motions brought by other entities. We filed a writ of mandate in the California Court of Appeal. Although the California Court of Appeal initially accepted our writ, it later indicated that it will not hear the issues raised by our writ until the case concludes in the Superior Court. Because GPT is constitutionally imposed in lieu of certain other taxes, BCC has filed protective tax refund claims with the City of Los Angeles, the California Department of Health Care Services and the Franchise Tax Board to protect its rights to recover certain taxes previously paid should BCC eventually be determined to be subject to the GPT for the tax periods at issue in the litigation. BCC intends to vigorously defend this suit; however, its ultimate outcome cannot be presently determined.

Express Scripts, Inc. Pharmacy Benefit Management Litigation

In March 2016, we filed a lawsuit against Express Scripts, Inc., or Express Scripts, our vendor for pharmacy benefit management, or PBM, services, captioned Anthem, Inc. v. Express Scripts, Inc., in the U.S. District Court for the Southern District of New York. The lawsuit seeks to recover over $14,800 in damages for pharmacy pricing that is higher than competitive benchmark pricing under the agreement between the parties, or ESI PBM Agreement, over $158 in damages related to operational breaches, as well as various declarations under the ESI PBM Agreement between the parties, including that Express Scripts: (i) breached its obligation to negotiate in good faith and to agree in writing to new pricing terms; (ii) is required to provide competitive benchmark pricing to us through the term of the ESI PBM Agreement; (iii) has breached the ESI PBM Agreement; and (iv) is required under the ESI PBM Agreement to provide post-termination services, at competitive benchmark pricing, for one year following any termination.

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Express Scripts has disputed our contractual claims and is seeking declaratory judgments: (i) regarding the timing of the periodic pricing review under the ESI PBM Agreement; and (ii) that it has no obligation to ensure that we receive any specific level of pricing, that we have no contractual right to any change in pricing under the ESI PBM Agreement and that its sole obligation is to negotiate proposed pricing terms in good faith. In the alternative, Express Scripts claims that we have been unjustly enriched by its payment of $4,675 at the time of the ESI PBM Agreement. In March 2017, the court granted our motion to dismiss Express Scripts’ counterclaims for (i) breach of the implied covenant of good faith and fair dealing, and (ii) unjust enrichment with prejudice. The only remaining claims are for breach of contract and declaratory relief. We intend to vigorously pursue our claims and defend against any counterclaims, which we believe are without merit; however, the ultimate outcome cannot be presently determined.

In re Express Scripts/Anthem ERISA Litigation

We are a defendant in a class action lawsuit that was initially filed in June 2016 against Anthem, Inc. and Express Scripts, which has been consolidated into a single multi-district lawsuit captioned In Re Express Scripts/Anthem ERISA Litigation, in the U.S. District Court for the Southern District of New York. The consolidated complaint was filed by plaintiffs against Express Scripts and us on behalf of all persons who are participants in or beneficiaries of any ERISA or non-ERISA healthcare plan from December 1, 2009 to the present in which we provided prescription drug benefits through the ESI PBM Agreement and paid a percentage based co-insurance payment in the course of using that prescription drug benefit. The plaintiffs allege that we breached our duties, either under ERISA or with respect to the implied covenant of good faith and fair dealing implied in the health plans, (i) by failing to adequately monitor Express Scripts’ pricing under the ESI PBM Agreement and (ii) by placing our own pecuniary interest above the best interests of our insureds by allegedly agreeing to higher pricing in the ESI PBM Agreement in exchange for the purchase price for our NextRx PBM business, and (iii) with respect to the non-ERISA members, by negotiating and entering into the ESI PBM Agreement that was allegedly detrimental to the interests of such non-ERISA members. Plaintiffs seek to hold us and Express Scripts jointly and severally liable and to recover all losses suffered by the proposed class, equitable relief, disgorgement of alleged ill-gotten gains, injunctive relief, attorney’s fees and costs and interest.

In April 2017, we filed a motion to dismiss the claims brought against us, and it was granted, without prejudice, in January 2018. Plaintiffs filed a notice of appeal with the United States Court of Appeals for the Second Circuit, which was heard in October 2018. We intend to vigorously defend this suit; however, its ultimate outcome cannot be presently determined.

Cigna Corporation Merger Litigation

In July 2015, we and Cigna Corporation, or Cigna, announced that we entered into the Agreement and Plan of Merger, or Cigna Merger Agreement, pursuant to which we would acquire all outstanding shares of Cigna. In July 2016, the U.S. Department of Justice, or DOJ, along with certain state attorneys general, filed a civil antitrust lawsuit in the U.S. District Court for the District of Columbia, or District Court, seeking to block the merger. In February 2017, Cigna purported to terminate the Cigna Merger Agreement and commenced litigation against us in the Delaware Court of Chancery, or Delaware Court, seeking damages, including the $1,850 termination fee pursuant to the terms of the Cigna Merger Agreement, and a declaratory judgment that its purported termination of the Cigna Merger Agreement was lawful, among other claims, which is captioned Cigna Corp. v. Anthem Inc.

Also in February 2017, we initiated our own litigation against Cigna in the Delaware Court seeking a temporary restraining order to enjoin Cigna from terminating the Cigna Merger Agreement, specific performance compelling Cigna to comply with the Cigna Merger Agreement and damages, which is captioned Anthem Inc. v. Cigna Corp. In April 2017, the U.S. Circuit Court of Appeals for the District of Columbia affirmed the ruling of the District Court, which blocked the merger. In May 2017, after the Delaware Court denied our motion to enjoin Cigna from terminating the Cigna Merger Agreement, we delivered to Cigna a notice terminating the Cigna Merger Agreement.

In the Delaware Court litigation, trial commenced in late February 2019 and concluded in March 2019. The Delaware Court has set closing argument for September 11, 2019. We believe Cigna’s allegations are without merit and we intend to vigorously pursue our claims and defend against Cigna’s allegations; however, the ultimate outcome of our litigation with Cigna cannot be presently determined. In October 2018, a shareholder filed a derivative lawsuit in the State of Indiana Marion County Superior Court, captioned Henry Bittmann, Derivatively, et al. v. Joseph R Swedish, et al., purportedly on behalf of Anthem and its shareholders against certain current and former directors and officers alleging breaches of fiduciary

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duties, unjust enrichment and corporate waste associated with the Cigna Merger Agreement. This case has been stayed at the request of the parties pending the outcome of our litigation with Cigna in the Delaware Court. This lawsuit’s ultimate outcome cannot be presently determined.

U.S. Department of Justice (DOJ) Civil Investigative Demands

Beginning in December 2016, the DOJ has issued civil investigative demands to us to discover information about our chart review and risk adjustment programs under Parts C and D of the Medicare Program. We understand the DOJ is investigating the programs of other Medicare Advantage health plans, along with providers and vendors. We continue to cooperate with the DOJ’s investigation, and the ultimate outcome cannot presently be determined.

Cyber Attack Regulatory Proceedings and Litigation

In February 2015, we reported that we were the target of a sophisticated external cyber attack. The attackers gained unauthorized access to certain of our information technology systems and obtained personal information related to many individuals and employees, such as names, birth dates, healthcare identification/social security numbers, street addresses, email addresses, phone numbers and employment information, including income data. To date, there is no evidence that credit card or medical information, such as claims, test results or diagnostic codes, were targeted, accessed or obtained, although no assurance can be given that we will not identify additional information that was accessed or obtained.

Upon discovery of the cyber attack, we took immediate action to remediate the security vulnerability and retained a cybersecurity firm to evaluate our systems and identify solutions based on the evolving landscape. We have provided credit monitoring and identity protection services to those who have been affected by this cyber attack. We have continued to implement security enhancements since this incident. We have incurred expenses subsequent to the cyber attack to investigate and remediate this matter and expect to continue to incur expenses of this nature in the foreseeable future. We recognize these expenses in the periods in which they are incurred.

Federal and state agencies, including state insurance regulators, state attorneys general, the Health and Human Services Office of Civil Rights and the Federal Bureau of Investigation, are investigating, or have investigated, events related to the cyber attack, including how it occurred, its consequences and our responses. The investigations have all been resolved with the exception of an ongoing investigation by a multi-state group of Attorneys General, which remains outstanding. Although we are cooperating in this investigation, we may be subject to additional fines or other obligations, which may have an adverse effect on how we operate our business and an adverse effect on our results of operations and financial condition. We intend to vigorously defend the remaining regulatory investigation; however, its ultimate outcome cannot be presently determined.

We have contingency plans and insurance coverage for certain expenses and potential liabilities of this nature and will pursue coverage for all applicable losses; however, the ultimate outcome of our pursuit of insurance coverage cannot be presently determined.

Other Contingencies

From time to time, we and certain of our subsidiaries are parties to various legal proceedings, many of which involve claims for coverage encountered in the ordinary course of business. We, like HMOs and health insurers generally, exclude certain healthcare and other services from coverage under our HMO, PPO and other plans. We are, in the ordinary course of business, subject to the claims of our enrollees arising out of decisions to restrict or deny reimbursement for uncovered services. The loss of even one such claim, if it results in a significant punitive damage award, could have a material adverse effect on us. In addition, the risk of potential liability under punitive damage theories may increase significantly the difficulty of obtaining reasonable settlements of coverage claims.

In addition to the lawsuits described above, we are also involved in other pending and threatened litigation of the character incidental to our business, and are from time to time involved as a party in various governmental investigations, audits, reviews and administrative proceedings. These investigations, audits, reviews and administrative proceedings include routine and special inquiries by state insurance departments, state attorneys general, the U.S. Attorney General and subcommittees of the U.S. Congress. Such investigations, audits, reviews and administrative proceedings could result in the imposition of civil or criminal fines, penalties, other sanctions and additional rules, regulations or other restrictions on our

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business operations. Any liability that may result from any one of these actions, or in the aggregate, could have a material adverse effect on our consolidated financial position or results of operations.

Contractual Obligations and Commitments

Express Scripts, through our ESI PBM Agreement, is the provider of certain PBM services to our plans. In October 2017, we established a new pharmacy benefits manager, called IngenioRx, and entered into a five-year agreement with CaremarkPCS Health, L.L.C., or CVS Health, which is a subsidiary of CVS Health Corporation, to begin offering PBM solutions, or the CVS PBM Agreement. In January 2019, we exercised our contractual right to terminate the ESI PBM Agreement earlier than the original expiration date of December 31, 2019 due to the recent acquisition of Express Scripts by Cigna. As a result of exercising our early termination right, the ESI PBM Agreement terminated on March 1, 2019, and on March 2, 2019, the twelve-month transition period to migrate the services from Express Scripts began. We expect CVS Health to begin providing certain PBM services to IngenioRx pursuant to the CVS PBM Agreement in the second quarter of 2019. Notwithstanding our termination of the ESI PBM Agreement, the litigation between us and Express Scripts regarding the ESI PBM Agreement continues. In March 2016, we filed a lawsuit against Express Scripts seeking to recover damages for pharmacy pricing that is higher than competitive benchmark pricing, damages related to operational breaches, as well as various declarations under the ESI PBM Agreement between the parties. For additional information regarding this lawsuit, refer to the Litigation and Regulatory Proceedings-Express Scripts, Inc. Pharmacy Benefit Management Litigation section above. We believe we have appropriately recognized all rights and obligations under the ESI PBM Agreement as of March 31, 2019.

12. Capital Stock

Use of Capital – Dividends and Stock Repurchase Program

We regularly review the appropriate use of capital, including acquisitions, common stock and debt security repurchases and dividends to shareholders. The declaration and payment of any dividends or repurchases of our common stock or debt is at the discretion of our Board of Directors and depends upon our financial condition, results of operations, future liquidity needs, regulatory and capital requirements and other factors deemed relevant by our Board of Directors.

A summary of the cash dividend activity for the three months ended March 31, 2019 and 2018 is as follows:

Declaration Date	Record Date	Payment Date	Cash Dividend per Share	Total
Three Months Ended March 31, 2019
January 29, 2019	March 18, 2019	March 29, 2019	$0.80	$	206
Three Months Ended March 31, 2018
January 30, 2018	March 9, 2018	March 23, 2018	$0.75	$	192

On April 23, 2019, our Audit Committee declared a second quarter 2019 dividend to shareholders of $0.80 per share, payable on June 25, 2019 to shareholders of record at the close of business on June 10, 2019.

Under our Board of Directors’ authorization, we maintain a common stock repurchase program. On December 7, 2017, the Board of Directors authorized a $5,000 increase to the common stock repurchase program. Repurchases may be made from time to time at prevailing market prices, subject to certain restrictions on volume, pricing and timing. The repurchases are effected from time to time in the open market, through negotiated transactions, including accelerated share repurchase agreements, and through plans designed to comply with Rule 10b5-1 under the Securities Exchange Act of 1934, as amended. Our stock repurchase program is discretionary, as we are under no obligation to repurchase shares. We repurchase shares under the program when we believe it is a prudent use of capital. The excess cost of the repurchased shares over par value is charged on a pro rata basis to additional paid-in capital and retained earnings.

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A summary of common stock repurchases from April 1, 2019 through April 15, 2019 (subsequent to March 31, 2019) and for the three months ended March 31, 2019 and 2018 is as follows:

	April 1, 2019   Through   April 15, 2019		Three Months Ended March 31
			2019		2018
Shares repurchased	0.2		1.1		1.7
Average price per share	$	287.16	$	275.23	$	233.51
Aggregate cost	$	51	$	294	$	394
Authorization remaining at the end of the period	$	5,148	$	5,199	$	6,783

For additional information regarding the use of capital for debt security repurchases, see Note 10, “Debt” of this Form 10-Q and Note 12, “Debt,” to our audited consolidated financial statements as of and for the year ended December 31, 2018 included in our 2018 Annual Report on Form 10-K.

Stock Incentive Plans

A summary of stock option activity for the three months ended March 31, 2019 is as follows:

	Number of Shares		Weighted- Average Option Price per Share		Weighted- Average Remaining Contractual Life (Years)	Aggregate Intrinsic Value
Outstanding at January 1, 2019	3.7		$	149.65
Granted	0.7		307.66
Exercised	(0.5	)	121.08
Forfeited or expired	—		204.80
Outstanding at March 31, 2019	3.9		181.02		6.71	$	423
Exercisable at March 31, 2019	2.4		135.06		5.24	$	360

A summary of the nonvested restricted stock activity, including restricted stock units, for the three months ended March 31, 2019 is as follows:

	Restricted Stock Shares and Units		Weighted- Average Grant Date Fair Value per Share
Nonvested at January 1, 2019	1.7		$	183.32
Granted	0.5		307.59
Vested	(0.7	)	150.13
Forfeited	—		212.54
Nonvested at March 31, 2019	1.5		239.40

During the three months ended March 31, 2019, we granted approximately 0.2 restricted stock units that are contingent upon us achieving earnings targets over the three year period from 2019 to 2021. These grants have been included in the activity shown above, but will be subject to adjustment at the end of 2021 based on results in the three year period.

Fair Value

We use a binomial lattice valuation model to estimate the fair value of all stock options granted. For a more detailed discussion of our stock incentive plan fair value methodology, see Note 14, “Capital Stock,” to our audited consolidated financial statements as of and for the year ended December 31, 2018 included in our 2018 Annual Report on Form 10-K.

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The following weighted-average assumptions were used to estimate the fair values of options granted during the three months ended March 31, 2019 and 2018:

	Three Months Ended March 31
	2019		2018
Risk-free interest rate	2.69	%	2.90	%
Volatility factor	25.00	%	30.00	%
Quarterly dividend yield	0.260	%	0.323	%
Weighted-average expected life (years)	4.40		3.70

The following weighted-average fair values per option or share were determined for the three months ended March 31, 2019 and 2018:

	Three Months Ended March 31
	2019		2018
Options granted during the period	$	68.92	$	55.31
Restricted stock awards granted during the period	307.59		232.15

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13. Accumulated Other Comprehensive Loss

A reconciliation of the components of accumulated other comprehensive loss at March 31, 2019 and 2018 is as follows:

	March 31
	2019			2018
Investments, excluding non-credit component of other-than-temporary impairments:
Gross unrealized gains	$	379		$	239
Gross unrealized losses	(121		)	(220		)
Net pre-tax unrealized gains	258			19
Deferred tax liability	(61		)	(5		)
Net unrealized gains on investments	197			14
Non-credit components of other-than-temporary impairments on investments:
Unrealized losses	(3		)	—
Deferred tax asset	1			—
Net unrealized non-credit component of other-than-temporary impairments on investments	(2		)	—
Cash flow hedges:
Gross unrealized losses	(308		)	(322		)
Deferred tax asset	65			67
Net unrealized losses on cash flow hedges	(243		)	(255		)
Defined benefit pension plans:
Deferred net actuarial loss	(744		)	(612		)
Deferred prior service credits	(1		)	(1		)
Deferred tax asset	191			159
Net unrecognized periodic benefit costs for defined benefit pension plans	(554		)	(454		)
Postretirement benefit plans:
Deferred net actuarial loss	(57		)	(77		)
Deferred prior service costs	31			43
Deferred tax asset	7			9
Net unrecognized periodic benefit costs for postretirement benefit plans	(19		)	(25		)
Foreign currency translation adjustments:
Gross unrealized losses	(3		)	(2		)
Deferred tax asset	1			1
Net unrealized losses on foreign currency translation adjustments	(2		)	(1		)
Accumulated other comprehensive loss	$	(623	)	$	(721	)

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Other comprehensive income (loss) reclassification adjustments for the three months ended March 31, 2019 and 2018 are as follows:

	Three Months Ended March 31
	2019		2018
Investments:
Net holding gain (loss) on investment securities arising during the period, net of tax (expense) benefit of $(98) and $77, respectively	$	350	$	(256	)
Reclassification adjustment for net realized loss on investment securities, net of tax benefit of $2 and $3, respectively	7		11
Total reclassification adjustment on investments	357		(245		)
Non-credit component of other-than-temporary impairments on investments:
Cash flow hedges:
Holding gain, net of tax expense of ($0) and ($8), respectively	3		29
Other:
Net change in unrecognized periodic benefit costs for defined benefit pension and postretirement benefit plans, net of tax expense of ($1) and ($3), respectively	3		7
Net gain (loss) recognized in other comprehensive income, net of tax (expense) benefit of ($101) and $63, respectively	$	363	$	(209	)

14. Earnings per Share

The denominator for basic and diluted earnings per share for the three months ended March 31, 2019 and 2018 is as follows:

	Three Months Ended   March 31
	2019	2018
Denominator for basic earnings per share – weighted-average shares	257.1	255.8
Effect of dilutive securities – employee stock options, nonvested restricted stock awards, convertible debentures and equity units	5.2	7.0
Denominator for diluted earnings per share	262.3	262.8

During the three months ended March 31, 2019 and 2018, weighted-average shares related to certain stock options of 0.2 and 0.3, respectively, were excluded from the denominator for diluted earnings per share because the stock options were anti-dilutive.

During the three months ended March 31, 2019, we issued approximately 0.5 restricted stock units under our stock incentive plans, 0.2 of which vesting is contingent upon us meeting specified annual earnings targets for the three year period of 2019 through 2021. During the three months endedMarch 31, 2018, we issued approximately 0.8 restricted stock units under our stock incentive plans, 0.3 of which vesting is contingent upon us meeting specified annual earnings targets for the three year period of 2018 through 2020. The contingent restricted stock units have been excluded from the denominator for diluted earnings per share and will be included only if and when the contingency is met.

15. Segment Information

The results of our operations are described through three reportable segments: Commercial & Specialty Business, Government Business and Other, as further described in Note 19, “Segment Information,” to our audited consolidated financial statements as of and for the year ended December 31, 2018 included in our 2018 Annual Report on Form 10-K.

During the fourth quarter of 2018, we reclassified certain ancillary businesses to reflect changes in how our segments are being managed. Amounts for 2018 have been reclassified for comparability.

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Financial data by reportable segment for the three months ended March 31, 2019 and 2018 is as follows:

	Commercial & Specialty Business		Government Business		Other			Total
Three Months Ended March 31, 2019
Operating revenue	$	9,392	$	14,993	$	3		$	24,388
Operating gain (loss)	1,587		383		(30		)	1,940
Three Months Ended March 31, 2018
Operating revenue	$	8,951	$	13,390	$	1		$	22,342
Operating gain (loss)	1,409		481		(22		)	1,868

The major product revenues for each of the reportable segments for the three months ended March 31, 2019 and 2018 are as follows:

	Three Months Ended   March 31
	2019		2018
Commercial & Specialty Business
Managed care products	$	7,618	$	7,278
Managed care services	1,366		1,278
Dental/Vision products and services	323		305
Other	85		90
Total Commercial & Specialty Business	9,392		8,951
Government Business
Managed care products	14,819		13,237
Managed care services	174		153
Total Government Business	14,993		13,390
Other
Other	3		1
Total product revenues	$	24,388	$	22,342

The classification between managed care products and managed care services in the above table primarily distinguishes between the levels 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. 

A reconciliation of reportable segments’ operating revenue to the amounts of total revenues included in our consolidated statements of income for the three months ended March 31, 2019 and 2018 is as follows:

	Three Months Ended   March 31
	2019			2018
Reportable segments’ operating revenue	$	24,388		$	22,342
Net investment income	210			229
Net realized gains (losses) on financial instruments	78			(26		)
Other-than-temporary impairment losses recognized in income	(10		)	(8		)
Total revenues	$	24,666		$	22,537

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A reconciliation of reportable segments’ operating gain to income before income tax expense included in our consolidated statements of income for the three months ended March 31, 2019 and 2018 is as follows:

	Three Months Ended   March 31
	2019			2018
Reportable segments’ operating gain	$	1,940		$	1,868
Net investment income	210			229
Net realized gains (losses) on financial instruments	78			(26		)
Other-than-temporary impairment losses recognized in income	(10		)	(8		)
Interest expense	(187		)	(184		)
Amortization of other intangible assets	(87		)	(80		)
Gain (loss) on extinguishment of debt	1			(19		)
Income before income tax expense	$	1,945		$	1,780

16. Leases

We lease office space and certain computer and related equipment using noncancelable operating leases. Our leases have remaining lease terms of 1 year to 15 years, one of which includes an option to extend the lease for 10 years.

The information related to our leases is as follows:

	Balance Sheet Location	March 31, 2019
Operating Leases
Right-of-use assets	Other noncurrent assets	$	606
Lease liabilities, current	Other current liabilities	175
Lease liabilities, noncurrent	Other noncurrent liabilities	519

	Three Months Ended   March 31, 2019
Lease Expense
Operating lease expense	$	45
Short-term lease expense	12
Sublease income	(4		)
Total lease expense	$	53
Other information
Operating cash paid for amounts included in the measurement of lease liabilities, operating leases	$	44
Weighted average remaining lease term, operating leases	6.5 years
Weighted average discount rate, operating leases	3.97		%

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At March 31, 2019, future lease payments for noncancellable operating leases with initial or remaining terms of one year or more are as follows:

2019 (excluding the three months ended March 31, 2019)	$	134
2020	145
2021	116
2022	102
2023	84
Thereafter	240
Total future minimum payments	821
Less imputed interest	(127		)
Total lease liabilities	$	694

As of March 31, 2019, we have an additional operating lease with undiscounted lease payments of $104 for a building space that the lessor and its agents are currently building. The lease has a lease term of 12 years and is expected to commence in 2020 when the construction is completed and we take possession of the building.

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

(In Millions, Except Per Share Data or as Otherwise Stated Herein)

This Management’s Discussion and Analysis of Financial Condition and Results of Operations, or MD&A, should be read in conjunction with the accompanying consolidated financial statements and notes, our consolidated financial statements and notes as of and for the year ended December 31, 2018 and the MD&A included in our 2018 Annual Report on Form 10-K. References to the terms “we,” “our,” “us,” or “Anthem” used throughout this MD&A refer to Anthem, Inc., an Indiana corporation, and unless the context otherwise requires, its direct and indirect subsidiaries. References to the “states” include the District of Columbia, unless the context otherwise requires.

Results of operations, cost of care trends, investment yields and other measures for the three months ended March 31, 2019 are not necessarily indicative of the results and trends that may be expected for the full year ending December 31, 2019, or any other period.

Overview

We are one of the largest health benefits companies in the United States in terms of medical membership, serving approximately 41medical members through our affiliated health plans as of March 31, 2019. We serve our members as the Blue Cross licensee for California and as the Blue Cross and Blue Shield, or BCBS, licensee for Colorado, Connecticut, Georgia, Indiana, Kentucky, Maine, Missouri (excluding 30counties in the Kansas City area), Nevada, New Hampshire, New York (in the New York City metropolitan area and upstate New York), Ohio, Virginia (excluding the Northern Virginia suburbs of Washington, D.C.) and Wisconsin. In a majority of these service areas, we do business as Anthem Blue Cross, Anthem Blue Cross and Blue Shield, and Empire Blue Cross Blue Shield or Empire Blue Cross. We also conduct business through arrangements with other BCBS licensees. Through our subsidiaries, we also serve customers in numerous states across the country as America’s 1st Choice, Amerigroup, Aspire Health, CareMore, Freedom Health, HealthLink, HealthSun, Optimum HealthCare, Simply Healthcare, and/or Unicare. We are licensed to conduct insurance operations in all 50 states and the District of Columbia through our subsidiaries.

For additional information about our organization, see Part I, Item 1, “Business” and Part II, Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” included in our 2018 Annual Report on Form 10-K. Additional information on our segments can be found in this MD&A and in Note 15, “Segment Information” of the Notes to Consolidated Financial Statements included in Part I, Item 1 of this Form 10-Q.

Business Trends

The Patient Protection and Affordable Care Act and the Health Care and Education Reconciliation Act of 2010, as amended, or collectively, the ACA, has changed and may continue to make broad-based changes to the U.S. health care system, which we expect will continue to impact our business model and strategy. Also, the legal challenges regarding the ACA, including the ultimate outcome of the December 2018 decision of the U.S. District Court for the Northern District of Texas, Fort Worth Division invalidating the ACA, or the 2018 Texas District Court ACA Decision, which judgment has been stayed pending appeal, could significantly disrupt our business. During 2018, we strategically reduced our participation in the Individual ACA-compliant market. Our strategy has been, and will continue to be, to only participate in rating regions where we have an appropriate level of confidence that these markets are on a path toward sustainability, including, but not limited to, factors such as expected financial performance, regulatory environment, and underlying market characteristics. We currently offer Individual ACA-compliant products in 73 of the 143 rating regions in which we operate.

In October 2017, we established a new pharmacy benefits manager, or PBM, called IngenioRx, and entered into a five-year agreement with CaremarkPCS Health, L.L.C., or CVS Health, which is a subsidiary of CVS Health Corporation, to begin offering PBM solutions (the “CVS PBM Agreement”) upon the conclusion of our PBM agreement with Express Scripts Inc., or Express Scripts (the “ESI PBM Agreement”). As a result of exercising our early termination right, the ESI PBM Agreement terminated on March 1, 2019, and on March 2, 2019, the twelve-month transition period to migrate the services from Express Scripts began. We expect CVS Health to begin providing certain PBM services to IngenioRx in the second quarter of 2019 pursuant to the CVS PBM Agreement. We expect IngenioRx to provide our members with more cost-

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effective solutions and improve our ability to integrate pharmacy benefits within our already strong medical and specialty platform.

Pricing Trends: We strive to price our healthcare benefit products consistent with anticipated underlying medical trends. We frequently make adjustments to respond to legislative and regulatory changes as well as pricing and other actions taken by existing competitors and new market entrants. Product pricing in our Commercial & Specialty Business segment, including our Individual and Small Group lines of business, remains competitive. The ACA imposed an annual Health Insurance Provider Fee, or HIP Fee, on health insurers that write certain types of health insurance on U.S. risks. We price our affected products to cover the impact of the HIP Fee. The HIP Fee was suspended for 2019 and is scheduled to resume for 2020.

Revenues from the Medicare and Medicaid programs are dependent, in whole or in part, upon annual funding from the federal government and/or applicable state governments.

Medical Cost Trends: Our medical cost trends are primarily driven by increases in the utilization of services across all provider types and the unit cost increases of these services. We work to mitigate these trends through various medical management programs such as utilization management, condition management, program integrity and specialty pharmacy management, as well as benefit design changes. There are many drivers of medical cost trends which can cause variance from our estimates, such as changes in the level and mix of services utilized, regulatory changes, aging of the population, health status and other demographic characteristics of our members, epidemics, advances in medical technology, new high cost prescription drugs, and healthcare provider or member fraud. Our underlying Local Group medical cost trends reflect the “allowed amount,” or contractual rate, paid to providers. We estimate that the 2019 Local Group medical cost trend will be in the range of 5.5% to 6.5%.

For additional discussion regarding business trends, see Part I, Item 1 “Business” section of our 2018 Annual Report on Form 10-K.

Regulatory Trends and Uncertainties

The ACA presented us with new growth opportunities, but also introduced new risks, regulatory challenges and uncertainties, and required changes in the way products are designed, underwritten, priced, distributed and administered. Changes to our business environment are likely to continue for the next several years as elected officials at the national and state levels continue to propose significant modifications to existing laws and regulations, including the reduction of the individual mandate penalty to zero effective January 1, 2019, elimination of funding for cost-sharing subsidies made available for qualified individuals, and changes to taxes and fees. In addition, the legal challenges regarding the ACA, including the ultimate outcome of the 2018 Texas District Court ACA Decision, continue to contribute to this uncertainty. We will continue to evaluate the impact of the ACA as additional guidance is made available and any further developments or judicial rulings occur.

The annual HIP Fee is allocated to health insurers based on the ratio of the amount of an insurer’s net premium revenues written during the preceding calendar year to the amount of health insurance premium for all U.S. health risk for those certain lines of business written during the preceding calendar year. We record our estimated liability for the HIP Fee in full at the beginning of the year with a corresponding deferred asset that is amortized on a straight-line basis to selling, general and administrative expense. The final calculation and payment of the annual HIP Fee is due by September 30^th of each fee year. The HIP Fee is non-deductible for federal income tax purposes. We price our affected products to cover the increased selling, general and administrative and income tax expenses associated with the HIP Fee. The total amount due from allocations to health insurers was $14,300 for 2018. For the three months ended March 31, 2018, we recognized $397 as general and administrative expense related to the HIP Fee. There was no corresponding expense for 2019 due to the suspension of the HIP Fee for 2019. The HIP Fee is scheduled to resume for 2020.

For additional discussion regarding regulatory trends and uncertainties and risk factors, see Part I, Item 1 “Business - Regulation” and Part I, Item 1A “Risk Factors”, and the “Regulatory Trends and Uncertainties” section of Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in our 2018 Annual Report on Form 10-K.

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Other Significant Items

In October 2017, we established IngenioRx and entered into the CVS PBM Agreement, which coincides with the conclusion of the ESI PBM Agreement. We exercised our contractual right and terminated the ESI PBM Agreement on March 1, 2019. The twelve-month transition period to migrate the services began on March 2, 2019. We expect CVS Health to begin providing certain PBM services to IngenioRx in the second quarter of 2019 pursuant to the CVS PBM Agreement. Notwithstanding our termination of the ESI PBM Agreement, the litigation between us and Express Scripts regarding the ESI PBM Agreement continues. For additional information regarding this lawsuit, see Note 11, “Commitments and Contingencies - Litigation and Regulatory Proceedings - Express Scripts, Inc. Pharmacy Benefit Management Litigation,” of the Notes to Consolidated Financial Statements included in Part I, Item 1 of this Form 10-Q.

On February 15, 2018, we completed our acquisition of Freedom Health, Inc., Optimum HealthCare, Inc., America’s 1st Choice of South Carolina, Inc. and related entities, or collectively, America’s 1st Choice, a Medicare Advantage organization that offers health maintenance organization products, including Chronic Special Needs Plans and Dual-Eligible Special Needs Plans under its Freedom Health and Optimum HealthCare brands in Florida and its America’s 1st Choice of South Carolina brand in South Carolina. For additional information, see Note 3, “Business Acquisitions,” of the Notes to Consolidated Financial Statements included in Part I, Item 1 of this Form 10-Q.

On May 12, 2017, we announced that we were terminating the Agreement and Plan of Merger, or Merger Agreement, between us and Cigna Corporation. For additional information about ongoing litigation related to the Merger Agreement, see Note 11, “Commitments and Contingencies - Litigation and Regulatory Proceedings - Cigna Corporation Merger Litigation,” of the Notes to Consolidated Financial Statements included in Part I, Item 1 of this Form 10-Q.

Selected Operating Performance

For the twelve months ended March 31, 2019, total medical membership increased1,156, or 2.9%. Our medical membership grew across our business segments as well as by customer type and funding arrangement. The increase in medical membership in our Government Business segment was primarily due to growth in our Medicaid and Medicare businesses. The increase in medical membership in our Commercial & Specialty Business segment was primarily due to growth in our National business.

Operating revenue for the three months ended March 31, 2019 was $24,388, an increase of $2,046, or 9.2%, from the three months ended March 31, 2018. This increase was primarily a result of higher premium revenue in our Government Business segment and, to a lesser extent, higher premium revenue in our Commercial & Specialty Business segment.

Net income for the three months ended March 31, 2019 was $1,551, an increase of $239, or 18.2%, from the three months ended March 31, 2018. This increase was due to higher operating results in our Commercial & Specialty Business segment.

Our diluted earnings per share, or EPS, was $5.91 for the three months ended March 31, 2019, which represented an 18.4%increase from EPS of $4.99 for the three months ended March 31, 2018. This increase primarily resulted from the increase in net income in 2019.

Operating cash flow for the three months ended March 31, 2019 and 2018 was $1,630 and $2,215, respectively. This decrease was primarily due to the timing of Medicare prepayments received in 2018 and lower premium receipts as a result of the suspension of the HIP Fee for 2019. These decreases were partially offset by the impact of membership increases in our Medicaid and Medicare businesses.

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Membership

The following table presents our medical membership by customer type, funding arrangement and reportable segment as of March 31, 2019 and 2018. Also included below is other membership by product. The medical membership and other membership data presented are unaudited and in certain instances include estimates of the number of members represented by each contract at the end of the period.For a more detailed description of our medical membership, see the “Membership” section of Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in our 2018 Annual Report on Form 10-K.

	March 31
(In thousands)	2019	2018 1	Change		% Change
Medical Membership
Customer Type
Local Group	15,697	15,670	27		0.2	%
Individual	773	755	18		2.4	%
National:
National Accounts	7,757	7,684	73		1.0	%
BlueCard®	5,981	5,820	161		2.8	%
Total National	13,738	13,504	234		1.7	%
Medicare:
Medicare Advantage	1,144	916	228		24.9	%
Medicare Supplement	867	823	44		5.3	%
Total Medicare	2,011	1,739	272		15.6	%
Medicaid	7,033	6,457	576		8.9	%
Federal Employee Program®	1,591	1,562	29		1.9	%
Total Medical Membership by Customer Type	40,843	39,687	1,156		2.9	%
Funding Arrangement
Self-Funded	25,495	25,282	213		0.8	%
Fully-Insured	15,348	14,405	943		6.5	%
Total Medical Membership by Funding Arrangement	40,843	39,687	1,156		2.9	%
Reportable Segment
Commercial & Specialty Business	30,208	29,929	279		0.9	%
Government Business	10,635	9,758	877		9.0	%
Total Medical Membership by Reportable Segment	40,843	39,687	1,156		2.9	%
Other Membership
Life and Disability Members	4,849	4,641	208		4.5	%
Dental Members	5,955	5,786	169		2.9	%
Dental Administration Members	5,491	5,357	134		2.5	%
Vision Members	7,169	6,781	388		5.7	%
Medicare Part D Standalone Members	289	316	(27	)	(8.5	)%

1 During the fourth quarter of 2018, we made a number of changes to our membership reporting to better align our reported membership to the appropriate type, funding arrangement and segment. Accordingly, certain types of membership have been reclassified to conform to the current year presentation.

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Medical Membership

Total medical membership grew across our business segments as well as by customer type and funding arrangement. Fully-insured membership increased primarily due to growth in our Medicaid and Medicare businesses. Self-funded medical membership increased primarily due to higher activity from BlueCard^® membership. Medicaid membership increased primarily due to new businesses and expansions, partially offset by the membership decrease resulting from the loss of a contract. Medicare membership increased primarily due to higher sales during open enrollment. BlueCard^® membership increased due to higher membership activity at other Blue Cross and Blue Shield Association, or BCBSA, plans whose members reside in or travel to our licensed areas. National Accounts membership increased primarily due to new sales and in-group changes exceeding lapses.

Other Membership

Our other membership can be impacted by changes in our medical membership, as our medical members often purchase our other products that are ancillary to our health business. We have experienced growth in our life and disability and dental memberships primarily due to higher sales in our Large Group business. Dental administration membership increased primarily due to in-group changes. Vision membership increased due to higher sales in our Large Group and Medicare businesses.

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Consolidated Results of Operations

Our consolidated summarized results of operations and other financial information for the three months ended March 31, 2019 and 2018 are as follows:

	Three Months Ended   March 31
	2019			2018			$ Change			% Change
Total operating revenue	$	24,388		$	22,342		$	2,046		9.2	%
Net investment income	210			229			(19		)	(8.3	)%
Net realized gains (losses) on financial instruments	78			(26		)	104			(400.0	)%
Other-than-temporary impairment losses recognized in income	(10		)	(8		)	(2		)	25.0	%
Total revenues	24,666			22,537			2,129			9.4	%
Benefit expense	19,282			17,046			2,236			13.1	%
Selling, general and administrative expense	3,166			3,428			(262		)	(7.6	)%
Other expense1	273			283			(10		)	(3.5	)%
Total expenses	22,721			20,757			1,964			9.5	%
Income before income tax expense	1,945			1,780			165			9.3	%
Income tax expense	394			468			(74		)	(15.8	)%
Net income	$	1,551		$	1,312		$	239		18.2	%
Average diluted shares outstanding	262.3			262.8			(0.5		)	(0.2	)%
Diluted net income per share	$	5.91		$	4.99		$	0.92		18.4	%
Effective tax rate	20.3		%	26.3		%				(600)bp3
Benefit expense ratio2	84.4		%	81.5		%				290bp3
Selling, general and administrative expense ratio4	13.0		%	15.3		%				(230)bp3
Income before income tax expense as a percentage of total revenues	7.9		%	7.9		%				0bp3
Net income as a percentage of total revenues	6.3		%	5.8		%				50bp3

Certain of the following definitions are also applicable to all other results of operations tables in this discussion:

1 Includes interest expense, amortization of other intangible assets and (gain) loss on extinguishment of debt.

2 Benefit expense ratio represents benefit expense as a percentage of premium revenue. Premiums for the three months ended March 31, 2019 and 2018 were $22,843 and $20,903, respectively. Premiums are included in total operating revenue presented above.

3 bp = basis point; one hundred basis points = 1%.

4 Selling, general and administrative expense ratio represents selling, general and administrative expense as a percentage of total operating revenue.

Three Months Ended March 31, 2019Compared to theThree Months Ended March 31, 2018

The increase in total operating revenue was primarily due to higher premium revenue resulting from membership growth and rate increases across our businesses designed to cover overall cost trends. These increases were partially offset by the impact of the HIP Fee suspension for 2019, as we did not price affected products in 2019 to cover this fee.

We recognized net realized gains on financial instruments in the first quarter of 2019 compared to net realized losses on financial instruments in the first quarter of 2018. This change was primarily due to an increase in net realized gains on sales of equity securities.

Benefit expense increased due to membership growth across our businesses and higher medical costs in our Medicaid business.

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Our benefit expense ratio increased largely due to the loss of revenue associated with the HIP Fee suspension for 2019. Our benefit expense ratio was further impacted by the retroactive revenue adjustments in various Medicaid markets that we recognized in 2018 for the periods covering through 2017.

Our selling, general and administrative expense decreased primarily due to the suspension of the HIP Fee for 2019.

Our selling, general and administrative expense ratio decreased primarily due to the suspension of the HIP Fee for 2019 and the growth in operating revenue, as well as overall expense management.

Our income tax expense and effective tax rate decreased primarily due to the suspension of the non-tax deductible HIP Fee for 2019.

Our net income as a percentage of total revenue increased in 2019 as compared to 2018 as a result of all factors discussed above.

Reportable Segments Results of Operations

Our results of operations discussed throughout this MD&A are determined in accordance with U.S. generally accepted accounting principles, or GAAP. We also calculate operating gain and operating margin, non-GAAP measures, to further aid investors in understanding and analyzing our core operating results and comparing them among periods. We define operating revenue as premium income and administrative fees and other revenue. Operating gain is calculated as total operating revenue less benefit expense and selling, general and administrative expense. It does not include net investment income, net realized gains (losses) on financial instruments, other than temporary impairment losses recognized in income, interest expense, amortization of other intangible assets, (gain) loss on extinguishment of debt or income taxes, as these items are managed in our corporate shared service environment and are not the responsibility of operating segment management. Operating margin is calculated as operating gain divided by operating revenue. We use these measures as a basis for evaluating segment performance, allocating resources, forecasting future operating periods and setting incentive compensation targets. This information is not intended to be considered in isolation or as a substitute for income before income tax expense, net income or EPS, prepared in accordance with GAAP, and may not be comparable to similarly titled measures reported by other companies. For a reconciliation of reportable segments’ operating revenue to the amounts of total revenue included in the consolidated statements of income and a reconciliation of reportable segments’ operating gain to income before income tax expense, see Note 15, “Segment Information,” of the Notes to Consolidated Financial Statements included in Part I, Item 1 of this Form 10-Q.

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Our Commercial & Specialty Business, Government Business and Other segments’ summarized results of operations for the three months ended March 31, 2019 and 2018 are as follows:

	Three Months Ended   March 31
	2019			2018 1			$ Change			% Change
Commercial & Specialty Business
Operating revenue	$	9,392		$	8,951		$	441		4.9	%
Operating gain	$	1,587		$	1,409		$	178		12.6	%
Operating margin	16.9		%	15.7		%				120	bp
Government Business
Operating revenue	$	14,993		$	13,390		$	1,603		12.0	%
Operating gain	$	383		$	481		$	(98	)	(20.4	)%
Operating margin	2.6		%	3.6		%				(100	)bp
Other
Operating revenue2	$	3		$	1		$	2		200.0	%
Operating loss3	$	(30	)	$	(22	)	$	(8	)	36.4	%

1 During the fourth quarter of 2018, we reclassified certain ancillary businesses to align how our segments are being managed. Accordingly, certain amounts for the three months ended March 31, 2018 have been reclassified for comparability.

2 $ changes not material.

3 Primarily a result of changes in unallocated corporate expenses.

Three Months Ended March 31, 2019Compared to theThree Months Ended March 31, 2018

Commercial & Specialty Business

Operating revenue increased primarily due to higher premium revenue resulting from rate increases in our Local Group business designed to cover overall cost trends and membership increases in our Individual ACA and fully-insured National Accounts businesses. The increase was further due to higher administrative fees and other revenue resulting from rate increases for self-funded members in our Large Group and National Accounts businesses.

Operating gain increased primarily due to improved medical cost performance in our Local Group business and higher administrative fees and other revenue in our self-funded businesses driven by greater penetration of value-added services.

Government Business

Operating revenue increased primarily due to higher premium revenue resulting from membership growth in our Medicare business as a result of higher sales during open enrollment. The increase was further attributable to rate increases to cover overall cost trends in our Medicare and Medicaid businesses as well as increased premium revenue in our FEP business due to increased reimbursed benefit utilization.

Operating gain decreased primarily due to the impact of the retroactive revenue adjustments in various Medicaid markets that we recognized in 2018 for the periods covering through 2017. The decrease in operating gain was further attributable to continued elevated medical cost experience in our Medicaid business in certain states. These decreases in operating gain were partially offset by reduced selling, general and administrative expenses in 2019.

Critical Accounting Policies and Estimates

We prepare our consolidated financial statements in conformity with GAAP. Application of GAAP requires management to make estimates and assumptions that affect the amounts reported in our consolidated financial statements and

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accompanying notes and within this MD&A. We consider our most important accounting policies that require significant estimates and management judgment to be those policies with respect to liabilities for medical claims payable, income taxes, goodwill and other intangible assets, investments and retirement benefits. Our accounting policies related to these items are discussed in our 2018 Annual Report on Form 10-K in Note 2, “Basis of Presentation and Significant Accounting Policies,” to our audited consolidated financial statements as of and for the year ended December 31, 2018, as well as in the “Critical Accounting Policies and Estimates” section of Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” As of March 31, 2019, our critical accounting policies and estimates have not changed from those described in our 2018 Annual Report on Form 10-K.

Medical Claims Payable

The most subjective accounting estimate in our consolidated financial statements is our liability for medical claims payable. Our accounting policies related to medical claims payable are discussed in the references cited above. As of March 31, 2019, our critical accounting policies and estimates related to medical claims payable have not changed from those described in our 2018 Annual Report on Form 10-K. For a reconciliation of the beginning and ending balance for medical claims payable for the three months endedMarch 31, 2019 and 2018, see Note 9, “Medical Claims Payable,” of the Notes to Consolidated Financial Statements included in Part I, Item 1 of this Form 10-Q.

The following table provides a summary of the two key assumptions having the most significant impact on our incurred but not paid liability estimates for the three months ended March 31, 2019 and 2018, which are the trend and completion factors. These two key assumptions can be influenced by utilization levels, unit costs, mix of business, benefit plan designs, provider reimbursement levels, processing system conversions and changes, claim inventory levels, claim processing patterns, claim submission patterns and operational changes resulting from business combinations. 

	Favorable Developments by  Changes in Key Assumptions
	Three Months Ended   March 31
	2019		2018
Assumed trend factors	$	345	$	406
Assumed completion factors	110		227
Total	$	455	$	633

The favorable development recognized in the three months ended March 31, 2019 and 2018 resulted from trend factors in late 2018 and late 2017, respectively, developing more favorably than originally expected. Favorable development in the completion factors resulting from the latter parts of 2018 and 2017 developing faster than expected also contributed to the favorability.

The ratio of current year medical claims paid as a percent of current year net medical claims incurred was 64.7% and 66.5% for the three months ended March 31, 2019 and 2018, respectively. This ratio serves as an indicator of claims processing speed whereby claims were processed slightly faster during the three months ended March 31, 2018.

We calculate the percentage of prior year redundancies in the current period as a percent of prior year net medical claims payable less prior year redundancies in the current period in order to demonstrate the development of the prior year reserves. For the three months ended March 31, 2019, this metric was 6.7%, largely driven by favorable trend factor development at the end of 2018. For the three months ended March 31, 2018, this metric was 8.9%, largely driven by favorable trend factor development at the end of 2017.

We calculate the percentage of prior year redundancies in the current period as a percent of prior year net incurred medical claims to indicate the percentage of redundancy included in the preceding year calculation of current year net incurred medical claims. We believe this calculation supports the reasonableness of our prior year estimate of incurred medical claims and the consistency in our methodology. For the three months ended March 31, 2019, this metric was 0.7%, which was calculated using the redundancy of $455. For the three months ended March 31, 2018, the comparable metric was

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0.9%, which was calculated using the redundancy of $633. We believe these metrics demonstrate a generally consistent level of reserve conservatism.

New Accounting Pronouncements

For information regarding new accounting pronouncements that were adopted and new accounting pronouncements that were issued during the three months ended March 31, 2019, see the “Recently Adopted Accounting Guidance” and “Recent Accounting Guidance Not Yet Adopted” sections of Note 2, “Basis of Presentation and Significant Accounting Policies” of the Notes to Consolidated Financial Statements included in Part I, Item 1 of this Form 10-Q.

Liquidity and Capital Resources

Sources and Uses of Capital

Our cash receipts result primarily from premiums, administrative fees and other revenue, investment income, proceeds from the sale or maturity of our investment securities, proceeds from borrowings, and proceeds from the issuance of common stock under our employee stock plans. Cash disbursements result mainly from claims payments, administrative expenses, taxes, purchases of investment securities, interest expense, payments on borrowings, acquisitions, capital expenditures, repurchases of our debt securities and common stock and the payment of cash dividends. Cash outflows fluctuate with the amount and timing of settlement of these transactions. Any future decline in our profitability would likely have an unfavorable impact on our liquidity.

For a more detailed overview of our liquidity and capital resources management, see the “Introduction” section included in the “Liquidity and Capital Resources” section of Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in our 2018 Annual Report on Form 10-K.

For additional information regarding our sources and uses of capital during the three months ended March 31, 2019, see Note 5, “Derivative Financial Instruments,” Note 10, “Debt,” and Note 12, “Capital Stock - Use of Capital - Dividends and Stock Repurchase Program,” of the Notes to Consolidated Financial Statements included in Part I, Item 1 of this Form 10-Q.

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Liquidity

A summary of our major sources and uses of cash and cash equivalents for the three months ended March 31, 2019 and 2018 is as follows:

	Three Months Ended   March 31						2019 vs. 2018
	2019			2018			Change
Sources of Cash:
Net cash provided by operating activities	$	1,630		$	2,215		$	(585	)
Proceeds from sales, maturities, calls and redemptions of investments, net of purchases	—			1,152			(1,152		)
Issuances of common stock under employee stock plans	76			60			16
Issuances of commercial paper and short- and long-term debt, net of repayments	67			—			67
Other sources of cash, net	42			186			(144		)
Total Sources of Cash	1,815			3,613			(1,798		)
Uses of Cash:
Purchases of investments, net of proceeds from sales, maturities, calls and redemptions	(440		)	—			(440		)
Purchases of subsidiaries, net of cash acquired	—			(1,346		)	1,346
Repurchase and retirement of common stock	(294		)	(395		)	101
Purchases of property and equipment	(234		)	(218		)	(16		)
Repayments of commercial paper and short- and long-term debt, net of issuances	—			(85		)	85
Cash dividends	(206		)	(192		)	(14		)
Changes in bank overdrafts	—			(124		)	124
Other uses of cash, net	(92		)	(231		)	139
Total uses of cash	(1,266		)	(2,591		)	1,325
Effect of foreign exchange rates on cash and cash equivalents	(1		)	—			(1		)
Net increase in cash and cash equivalents	$	548		$	1,022		$	(474	)

The decrease in cash provided by operating activities was primarily due to the timing of Medicare prepayments received in 2018 and lower premium receipts as a result of the suspension of the HIP Fee for 2019. These decreases were partially offset by the impact of membership increases in our Medicaid and Medicare businesses.

Other significant changes in sources and uses of cash year-over-year included an increase in net purchases of investments and a decrease in cash paid for acquisitions.

Financial Condition

We maintained a strong financial condition and liquidity position, with consolidated cash, cash equivalents and investments in fixed maturity and equity securities of $24,013 at March 31, 2019. Since December 31, 2018, total cash, cash equivalents and investments in fixed maturity and equity securities increased by $1,374, primarily due to cash generated from operations.

Many of our subsidiaries are subject to various government regulations that restrict the timing and amount of dividends and other distributions that may be paid to their respective parent companies. Certain accounting practices prescribed by insurance regulatory authorities, or statutory accounting practices, differ from GAAP. Changes that occur in statutory accounting practices, if any, could impact our subsidiaries’ future dividend capacity. In addition, we have agreed to certain undertakings to regulatory authorities, including requirements to maintain certain capital levels in certain of our subsidiaries.

At March 31, 2019, we held $1,077 of cash, cash equivalents and investments at the parent company, which are available for general corporate use, including investment in our businesses, acquisitions, potential future common stock repurchases and dividends to shareholders, repurchases of debt securities and debt and interest payments.

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Debt

Periodically, we access capital markets and issue debt, or Notes, for long-term borrowing purposes, for example, to refinance debt, to finance acquisitions or for share repurchases. Certain of these Notes may have a call feature that allows us to redeem the Notes at any time at our option and/or a put feature that allows a Note holder to redeem the Notes upon the occurrence of both a change in control event and a downgrade of the Notes below an investment grade rating. For more information on our debt, including redemptions and issuances, see Note 10, “Debt” of the Notes to Consolidated Financial Statements included in Part I, Item 1 of this Form 10-Q.

We calculate our consolidated debt-to-capital ratio, a non-GAAP measure, from the amounts presented on our consolidated balance sheets included in Part I, Item 1 of this Form 10-Q. Our debt-to-capital ratio is calculated as total debt divided by total debt plus total shareholders’ equity. Total debt is the sum of short-term borrowings, current portion of long-term debt, long-term debt, less current portion, and beginning January 1, 2019, lease liabilities. We believe our debt-to-capital ratio assists investors and rating agencies in measuring our overall leverage and additional borrowing capacity. In addition, our bank covenants include a maximum debt-to-capital ratio that we cannot and did not exceed. Our debt-to-capital ratio may not be comparable to similarly titled measures reported by other companies. Our consolidated debt-to-capital ratio was 40.0% and 40.2% as of March 31, 2019 and December 31, 2018, respectively.

Our senior debt is rated “A” by S&P Global Ratings, “BBB” by Fitch Ratings, Inc., “Baa2” by Moody’s Investor Service, Inc. and “bbb+” by AM Best Company, Inc. We intend to maintain our senior debt investment grade ratings. If our credit ratings are downgraded, our business, financial condition and results of operations could be adversely impacted by limitations on future borrowings and a potential increase in our borrowing costs.

Future Sources and Uses of Liquidity

We have a shelf registration statement on file with the U.S. Securities and Exchange Commission to register an unlimited amount of any combination of debt or equity securities in one or more offerings. Specific information regarding terms and securities being offered will be provided at the time of an offering. Proceeds from future offerings are expected to be used for general corporate purposes, including, but not limited to, the repayment of debt, investments in or extensions of credit to our subsidiaries and the financing of possible acquisitions or business expansions.

We regularly review the appropriate use of capital, including acquisitions, common stock and debt security repurchases and dividends to shareholders. The declaration and payment of any dividends or repurchases of our common stock or debt is at the discretion of our Board of Directors and depends upon our financial condition, results of operations, future liquidity needs, regulatory and capital requirements and other factors deemed relevant by our Board of Directors.

For additional information regarding our sources and uses of capital at March 31, 2019, see Note 4, “Investments,” Note 5, “Derivative Financial Instruments,” Note 10, “Debt” and Note 12, “Capital Stock - Use of Capital - Dividends and Stock Repurchase Program” of the Notes to Consolidated Financial Statements included in Part I, Item 1 of this Form 10-Q.

Risk-Based Capital

Our regulated subsidiaries’ states of domicile have statutory risk-based capital, or RBC, requirements for health and other insurance companies and health maintenance organizations largely based on the National Association of Insurance Commissioners, or NAIC, RBC Model Act. These RBC requirements are intended to measure capital adequacy, taking into account the risk characteristics of an insurer’s investments and products. The NAIC sets forth the formula for calculating the RBC requirements, which are designed to take into account asset risks, insurance risks, interest rate risks and other relevant risks with respect to an individual insurance company’s business. In general, under the RBC Model Act, an insurance company must submit a report of its RBC level to the state insurance department or insurance commissioner, as appropriate, at the end of each calendar year. Our regulated subsidiaries’ respective RBC levels as of December 31, 2018, which was the most recent date for which reporting was required, were in excess of all mandatory RBC requirements. In addition to exceeding the RBC requirements, we are in compliance with the liquidity and capital requirements for a licensee of the BCBSA and with the tangible net equity requirements applicable to certain of our California subsidiaries.

For additional information, see Note 21, “Statutory Information,” in our audited consolidated financial statements as of and for the year ended December 31, 2018 included in our 2018 Annual Report on Form 10-K.

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Contractual Obligations and Commitments

We believe that funds from future operating cash flows, cash and investments and funds available under our senior revolving credit facility and/or from public or private financing sources, will be sufficient for future operations and commitments, and for capital acquisitions and other strategic transactions.

There have been no material changes to our Contractual Obligations and Commitments disclosure in our 2018 Annual Report on Form 10-K other than an increase in borrowings of commercial paper. For additional information regarding our estimated contractual obligations and commitments, see Note 5, “Derivative Financial Instruments,” Note 10, “Debt,” and the “Other Contingencies” and “Contractual Obligations and Commitments” sections of Note 11, “Commitments and Contingencies,” of the Notes to Consolidated Financial Statements included in Part I, Item 1 of this Form 10-Q.

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FORWARD-LOOKING STATEMENTS

This document contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements reflect our views about future events and financial performance and are generally not historical facts. Words such as “expect,” “feel,” “believe,” “will,” “may,” “should,” “anticipate,” “intend,” “estimate,” “project,” “forecast,” “plan” and similar expressions are intended to identify forward-looking statements. These statements include, but are not limited to: financial projections and estimates and their underlying assumptions; statements regarding plans, objectives and expectations with respect to future operations, products and services; and statements regarding future performance. Such statements are subject to certain risks and uncertainties, many of which are difficult to predict and generally beyond our control, that could cause actual results to differ materially from those expressed in, or implied or projected by, the forward-looking statements. You are cautioned not to place undue reliance on these forward- looking statements that speak only as of the date hereof. You are also urged to carefully review and consider the various risks and other disclosures discussed in our reports filed with the U.S. Securities and Exchange Commission from time to time, which attempt to advise interested parties of the factors that affect our business. Except to the extent otherwise required by federal securities laws, we do not undertake any obligation to republish revised forward-looking statements to reflect events or circumstances after the date hereof. These risks and uncertainties include, but are not limited to: the impact of federal and state regulation, including ongoing changes in the Patient Protection and Affordable Care Act and the Health Care and Education Reconciliation Act of 2010, as amended, or collectively, the ACA, and the ultimate outcome of legal challenges to the ACA; trends in healthcare costs and utilization rates; our ability to contract with providers on cost-effective and competitive terms; our ability to secure sufficient premium rates, including regulatory approval for and implementation of such rates; competitive pressures and our ability to adapt to changes in the industry and develop and implement strategic growth opportunities; reduced enrollment; unauthorized disclosure of member or employee sensitive or confidential information, including the impact and outcome of any investigations, inquiries, claims and litigation related thereto; risks and uncertainties regarding Medicare and Medicaid programs, including those related to non-compliance with the complex regulations imposed thereon; our ability to maintain and achieve improvement in Centers for Medicare and Medicaid Services, or CMS, Star ratings and other quality scores and funding risks with respect to revenue received from participation therein; a negative change in our healthcare product mix; costs and other liabilities associated with litigation, government investigations, audits or reviews; the ultimate outcome of litigation between Cigna Corporation, or Cigna, and us related to the merger agreement between the parties, including our claim for damages against Cigna, Cigna’s claim for payment of a termination fee and other damages against us, and the potential for such litigation to cause us to incur substantial costs, materially distract management and negatively impact our reputation and financial condition; non-compliance by any party with the pharmacy benefit management services agreements between us and each of Express Scripts, Inc., or Express Scripts, and CaremarkPCS Health, L.L.C., or CVS Health, as well as any agreements governing the transition of pharmacy benefit management services provided to us from Express Scripts to CVS Health, which could result in financial penalties, our inability to meet customer demands, and sanctions imposed by governmental entities, including CMS; medical malpractice or professional liability claims or other risks related to healthcare services and pharmacy benefit management services provided by our subsidiaries; possible restrictions in the payment of dividends from our subsidiaries and increases in required minimum levels of capital; our ability to repurchase shares of our common stock and pay dividends on our common stock due to the adequacy of our cash flow and earnings and other considerations; the potential negative effect from our substantial amount of outstanding indebtedness; a downgrade in our financial strength ratings; the effects of any negative publicity related to the health benefits industry in general or us in particular; failure to effectively maintain and modernize our information systems; events that may negatively affect our licenses with the Blue Cross and Blue Shield Association; large scale medical emergencies, such as future public health epidemics and catastrophes; general risks associated with mergers, acquisitions, joint ventures and strategic alliances; possible impairment of the value of our intangible assets if future results do not adequately support goodwill and other intangible assets; changes in economic and market conditions, as well as regulations that may negatively affect our liquidity and investment portfolios; changes in U.S. tax laws; intense competition to attract and retain employees; and various laws and provisions in our governing documents that may prevent or discourage takeovers and business combinations.

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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

For a discussion of our market risks, refer to Item 7A, “Quantitative and Qualitative Disclosures about Market Risk,” included in our 2018 Annual Report on Form 10-K. There have been no material changes to any of these risks since December 31, 2018.

ITEM 4. CONTROLS AND PROCEDURES

We carried out an evaluation as of March 31, 2019, under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures as defined in Rule 13a-15(e) of the Securities Exchange Act of 1934, as amended, or the Exchange Act. Based upon that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures are effective in timely alerting them to material information relating to us (including our consolidated subsidiaries) required to be disclosed in our reports under the Exchange Act. In addition, based on that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective in ensuring that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is accumulated and communicated to our management, including the Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosures.

There have been no changes in our internal control over financial reporting that occurred during the three months ended March 31, 2019 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

For information regarding legal proceedings at March 31, 2019, see the “Litigation and Regulatory Proceedings,” and “Other Contingencies” sections of Note 11, “Commitments and Contingencies” of the Notes to Consolidated Financial Statements included in Part I, Item 1 of this Form 10-Q.

ITEM 1A. RISK FACTORS

There have been no material changes to the risk factors disclosed in our 2018 Annual Report on Form 10-K.

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ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

Issuer Purchases of Equity Securities

The following table presents information related to our repurchases of common stock for the periods indicated:

Period	Total Number of Shares Purchased1	Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Programs2	Approximate Dollar Value of Shares that May Yet Be Purchased Under the Programs
(in millions, except share and per share data)
January 1, 2019 to January 31, 2019	582,336	$	257.64	580,943	$	5,344
February 1, 2019 to February 28, 2019	254,025	296.02		252,930	5,269
March 1, 2019 to March 31, 2019	487,055	302.16		235,371	5,199
	1,323,416			1,069,244

1 Total number of shares purchased includes 254,172 shares delivered to or withheld by us in connection with employee payroll tax withholding upon exercise or vesting of stock awards. Stock grants to employees and directors and stock issued for stock option plans and stock purchase plans in the consolidated statements of shareholders’ equity are shown net of these shares purchased.

2 Represents the number of shares repurchased through the common stock repurchase program authorized by our Board of Directors, which the Board of Directors evaluates periodically. During the three months ended March 31, 2019, we repurchased 1,069,244 shares at a cost of $294 under the program, including the cost of options to purchase shares. The Board of Directors has authorized our common stock repurchase program since 2003. The Board of Director's most recent authorized increase to the program was $5,000 on December 7, 2017. Between April 1, 2019 and April 15, 2019, we repurchased 179,200 shares at a cost of $51, bringing our current availability to $5,148 at April 15, 2019. No duration has been placed on our common stock repurchase program, and we reserve the right to discontinue the program at any time.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. MINE SAFETY DISCLOSURES

None.

ITEM 5. OTHER INFORMATION

None.

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ITEM 6. EXHIBITS

Exhibit Number		Exhibit
3.1		Amended and Restated Articles of Incorporation of the Company, as amended and restated effective May 16, 2018, incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed on May 16, 2018.
3.2		Bylaws of the Company, as amended effective May 16, 2018, incorporated by reference to Exhibit 3.2 to the Company's Current Report on Form 8-K filed on May 16, 2018.
4.7		Upon the request of the U.S. Securities and Exchange Commission, the Company will furnish copies of any other instruments defining the rights of holders of long-term debt of the Company or its subsidiaries.
10.2	*	(l)	Form of Incentive Compensation Plan Nonqualified Stock Option Award Agreement for 2019.
10.2	*	(m)	Form of Incentive Compensation Plan Restricted Stock Unit Award Agreement for 2019.
10.2	*	(n)	Form of Incentive Compensation Plan Performance Stock Unit Award Agreement for 2019.
31.1		Certification of Chief Executive Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a) of the Exchange Act Rules, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2		Certification of Chief Financial Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a) of the Exchange Act Rules, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1		Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2		Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101		The following material from Anthem, Inc.’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2019, formatted in XBRL (Extensible Business Reporting Language): (i) the Consolidated Balance Sheets; (ii) the Consolidated Statements of Income; (iii) the Consolidated Statements of Comprehensive Income; (iv) the Consolidated Statements of Cash Flows; (v) the Consolidated Statements of Shareholders’ Equity; and (vi) Notes to Consolidated Financial Statements.
*		Indicates management contracts or compensatory plans or arrangements.

-54-

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	ANTHEM, INC. Registrant
Date: April 24, 2019	By:	/S/  JOHN E. GALLINA
		John E. Gallina Executive Vice President and Chief Financial Officer (Duly Authorized Officer and Principal Financial Officer)
Date: April 24, 2019	By:	/S/  RONALD W. PENCZEK
		Ronald W. Penczek Senior Vice President and Chief Accounting Officer (Principal Accounting Officer)

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EX-10.2(L)

EXHIBIT 10.2(l)

Schedule A

Notice of Option Grant

Participant:        [●]

Company:        Anthem, Inc.

Notice: You have been granted the following nonqualified stock option to purchase shares of common stock of the Company in accordance with the terms of the Plan and the attached Nonqualified Stock Option Award Agreement.

Plan:    2017 Anthem Incentive Compensation Plan

Grant:            Grant Date:  [●]
            Option Price per Share: $[●]
            Number of Shares under Option:  [●]

Exercisability: Subject to the terms of the Plan and this Agreement, your Option will become exercisable on and after the dates indicated below as to the number of Shares set forth below opposite each such date, plus any Shares as to which your Option could have been exercised previously but was not so exercised.

Shares Date

In the event that a Change of Control (as defined in the Plan) occurs before your Termination, your Option will remain subject to the terms of this Agreement, unless the successor company does not assume your Option. If a successor company does not assume your Option, then your Option shall become fully exercisable immediately prior to the Change of Control.

Expiration Date: Your Option will expire ten years from the Grant Date, subject to earlier termination as set forth in the Plan and this Agreement.

Acceptance: In order to accept your Options, you must electronically accept this Agreement through the Company’s broker at any time within ninety (90) days after the Grant Date. To effect your acceptance, please follow the instructions included with your grant materials. Acceptance of the Agreement includes acceptance of the terms and conditions of the Plan. If you do not timely and electronically accept this Agreement, this Agreement will be null and void as of the 90th day after the Grant Date and you will have no right or claim to the Options described above.

2019 Stock Option Agreement

EXHIBIT 10.2(l)

Nonqualified Stock Option Award Agreement

This Nonqualified Stock Option Award Agreement (this “Agreement”) dated as of the Grant Date (the “Grant Date”) set forth in the Notice of Option Grant attached as Schedule A hereto (the “Grant Notice”) is made between Anthem, Inc. (the “Company”) and the Participant set forth in the Grant Notice. The Grant Notice is included in and made part of this Agreement.

1.Grant of the Option. Subject to the provisions of this Agreement and the provisions of the Plan, the Company hereby grants to the Participant, pursuant to the Plan, the right and option (the “Option”) to purchase all or any part of the number of shares of common stock of the Company (“Shares”) as set forth in the Grant Notice at an Option Price (“Option Price”) per share and on the other terms as set forth in the Grant Notice. This Option is intended to be a nonqualified stock option for federal income tax purposes.

2.    Method of Exercise of the Option.

(a)    The Participant may exercise the Option, to the extent then exercisable, by delivering a notice to the Company’s captive broker in a form specified or accepted by the captive broker, specifying the number of Shares with respect to which the Option is being exercised.

(b)    At the time the Participant exercises the Option, the Participant shall pay the Option Price of the Shares as to which the Option is being exercised and applicable taxes (i) in United States dollars by personal check, bank draft or money order; (ii) subject to such terms, conditions and limitations as the Compensation Committee of the Board of Directors of the Company (“Committee”) may prescribe, by tendering (either by actual delivery or attestation) unencumbered Shares previously acquired by the Participant having an aggregate Fair Market Value at the time of exercise equal to the total Option Price of the Shares for which the Option is so exercised; (iii) subject to such terms, conditions and limitations as the Committee may prescribe, a cashless (broker-assisted) exercise that complies with all applicable laws; or (iv) by a combination of the consideration provided for in the foregoing clauses (i), (ii) and (iii).

3.    Termination. The Option shall terminate upon the Participant’s Termination for any reason and no Shares may thereafter be purchased under the Option except as provided below. Notwithstanding anything contained in this Agreement, (i) a Participant who is in a position of Vice President or above must give at least 30 days advance written notice of his Termination due to resignation (including Retirement) in order for the Participant to exercise the Option for any period that may apply below and (ii) in no event shall the Option be exercisable after the Expiration Date. If less than 30 days advance written notice is given, the Option shall be immediately canceled, including the portion of the Option that is otherwise exercisable.

(a)    Retirement. If the Participant’s Termination is due to Retirement (for purposes of this Agreement, defined as the Participant’s Termination after attaining age fifty-five (55) with at least ten (10) completed years of service or after attaining age sixty-five (65)), the Option shall continue to become exercisable according to the schedule set forth in the Grant Notice; provided that the Option shall terminate on the five-year anniversary of the date of the Participant’s Retirement but not later than the Expiration Date noted on the attached Schedule A; provided, further, that if the Participant’s Termination is due to Retirement during the calendar year of the Grant Date, the Option shall be immediately terminated on a pro-rata basis, measured by the number of completed full months in that calendar year during which the Participant was employed by the Company or an Affiliate (e.g., if the Participant’s Retirement occurs in September, 33.3% (or 4/12) of the Option shall be immediately terminated), and the non-terminated portion of the Option shall continue to become exercisable according to the schedule set forth in the Grant Notice.¹ 

(b)    Death and Disability. If the Participant’s Termination is due to the Participant’s death or Disability (for purposes of this Agreement, as defined in the applicable Anthem Long-Term Disability Plan),

¹ This retirement provision is deleted in non-annual retention grants.

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EXHIBIT 10.2(l)

the Option shall immediately become fully exercisable and shall terminate on the five-year anniversary of the date of such Termination but not later than the Expiration Date noted on the attached Schedule A.

(c)    Termination without Cause. Unless Sections 3(a) or 3(e) are applicable, if the Participant’s Termination is by the Company or an Affiliate without Cause (for purposes of this Agreement, defined as a violation of “conduct” as such term is defined in the Anthem HR Corrective Action Policy and if the Participant participates in the Anthem, Inc. Executive Agreement Plan (the "Agreement Plan"), the Key Associate Agreement or the Key Sales Associate Agreement also as defined in that plan or agreement) or voluntarily by the Participant, the following shall apply:

(i)    Unless clause (ii) applies, the Option, to the extent fully exercisable as of the date of such Termination, shall thereafter only be exercisable for a period of ninety (90) days from the date of such Termination, but not later than the Expiration Date noted on the attached Schedule A.

(ii)    If the Participant is receiving severance under the Agreement Plan, the Anthem Supplemental Unemployment Benefit Plan, the Anthem Excess Termination Benefit Plan, the Key Associate Agreement or the Key Sales Associate Agreement and any portion of the Option remains unexercisable as of the Participant’s Termination, the Option shall continue to become exercisable through the earlier of (A) the last day of the period for which the Participant is receiving severance or (B) the last day of the schedule set forth in the Grant Notice. The Option shall be exercisable for a period of ninety (90) days from the date the severance period ends, but not later than the Expiration Date noted on the attached Schedule A.

(d)    Cause. If the Participant’s Termination is for Cause, even if on the date of such Termination the Participant has met the definition of Retirement or Disability, then the portion of the Option that has not been exercised shall immediately terminate.

(e)    Termination after Change of Control. If after a Change of Control the Participant’s Termination is (i) by the Company or an Affiliate without Cause or (ii) if the Participant participates in the Executive Agreement Plan, by the Participant for Good Reason (as defined in the Executive Agreement Plan), the Option shall immediately become fully exercisable and shall terminate on the five-year anniversary of the date of such Termination but not later than the Expiration Date noted on the attached Schedule A.

4.    Transferability of the Option. The Option shall not be transferable or assignable by the Participant except as provided in this Section 4 and the Option shall be exercisable, during the Participant’s lifetime, only by him/her or, during periods of legal disability, by his guardian or other legal representative. No Option shall be subject to execution, attachment, or similar process. The Participant shall have the right to appoint any individual or legal entity in writing, on a Designation of Beneficiary form as his/her beneficiary to receive any Option (to the extent not previously terminated or forfeited) under this Agreement upon the Participant’s death. Such designation under this Agreement may be revoked by the Participant at any time and a new beneficiary may be appointed by the Participant by execution and submission to the Company, or its designee, of a revised Designation of Beneficiary form to this Agreement. In order to be effective, a designation of beneficiary must be completed by the Participant on the Designation of Beneficiary form and received by the Company, or its designee, prior to the date of the Participant’s death. If the Participant dies without such designation, the Option may be exercised only by the executor or administrator of the Participant’s estate or by a person who shall have acquired the right to such exercise by will or by the laws of descent and distribution.

5.    Taxes and Withholdings. At the time of receipt of Shares upon the exercise of all or any part of the Option, the Participant shall pay to the Company in cash (or make other arrangements, in accordance with Article XVIII of the Plan, for the satisfaction of) any taxes of any kind required by law to be withheld with respect to such Shares; provided, however, that pursuant to any procedures, and subject to any limitations as the Committee may prescribe and subject to applicable law, the Participant may elect to satisfy, in whole or in part, such withholding obligations by (a) withholding Shares otherwise deliverable to the Participant pursuant to the Option (provided, however, that the amount of any Shares so withheld shall not exceed the amount necessary to satisfy required Federal, state, local and non-United States withholding obligations using the minimum statutory withholding rates for Federal, state, local

2019 Stock Option Agreement

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EXHIBIT 10.2(l)

and/or non-U.S. tax purposes, including payroll taxes, that are applicable to supplemental taxable income) and/or (b) tendering to the Company Shares owned by the Participant (or the Participant and the Participant’s spouse jointly) based, in each case, on the Fair Market Value of the Shares on the payment date as determined by the Committee. Any such election made by the Participant must be irrevocable, made in writing, signed by the Participant, and shall be subject to any restrictions or limitations that the Committee, in its sole discretion, deems appropriate.

6.    No Rights as a Shareholder. Neither the Participant nor any other person shall become the beneficial owner of the Shares subject to the Option, nor have any rights to dividends or other rights as a shareholder with respect to any such Shares, until the Participant has actually received such Shares following the exercise of the Option in accordance with the terms of the Plan and this Agreement.

7.    Restrictive Covenants. For purposes of Sections 7, 8, 9, 10 and 11 of this Agreement, Company shall mean Anthem, Inc. and its subsidiaries and affiliates. The Participant acknowledges that s/he has the right to consult with counsel at the Participant’s sole expense. As a condition to receipt of the Option Grant made under this Agreement, which the Participant and the Company agree is fair and reasonable consideration, the Participant agrees as follows:

(a)    Confidentiality.

(i)    The Participant recognizes that the Company derives substantial economic value from information created and used in its business which is not generally known by the public, including, but not limited to, plans, designs, concepts, computer programs, formulae, and equations; product fulfillment and supplier information; customer and supplier lists, and confidential business practices of the Company, its affiliates and any of its customers, vendors, business partners or suppliers; profit margins and the prices and discounts the Company obtains or has obtained or at which it sells or has sold or plans to sell its products or services (except for public pricing lists); manufacturing, assembling, labor and sales plans and costs; business and marketing plans, ideas, or strategies; confidential financial performance and projections; employee compensation; employee staffing and recruiting plans and employee personal information; and other confidential concepts and ideas related to the Company’s business (collectively, “Confidential Information”). The Participant expressly acknowledges and agrees that by virtue of his/her employment with the Company, the Participant will have access and will use in the course of the Participant’s duties certain Confidential Information and that Confidential Information constitutes trade secrets and confidential and proprietary business information of the Company, all of which is the exclusive property of the Company. For purposes of this Agreement, Confidential Information includes the foregoing and other information protected under the Indiana Uniform Trade Secrets Act (the “Act”), or to any comparable protection afforded by applicable law, but does not include information that the Participant establishes by clear and convincing evidence is or may become known to the Participant or to the public from sources outside the Company and through means other than a breach of this Agreement. Notwithstanding the foregoing, in accordance with the Defend Trade Secrets Act of 2016, the Participant will not be held criminally or civilly liable under any federal or state trade secret law for the disclosure of a trade secret that: (A) is made (1) in confidence to a federal, state, or local government official, either directly or indirectly, or to an attorney; and (2) solely for the purpose of reporting or investigating a suspected violation of law; or (B) is made in a complaint or other document that is filed under seal in a lawsuit or other proceeding. If the Participant files a lawsuit for retaliation by the Company for reporting a suspected violation of law, the Participant may disclose the Company’s trade secrets to his/her attorney and use the trade secret information in the court proceeding if the Participant (A) files any document containing the trade secret under seal; and (B) does not disclose the trade secret, except pursuant to court order.

(ii)    The Participant agrees that the Participant will not for himself or herself or for any other person or entity, directly or indirectly, without the prior written consent of the Company, while employed by the Company and thereafter: (A) use Confidential Information for the benefit of any person or entity other than the Company or its affiliates; (B) remove, copy, duplicate or otherwise reproduce any document or tangible item embodying or pertaining to any of the Confidential Information, except as required to perform the Participant’s duties for the Company or

2019 Stock Option Agreement

4

EXHIBIT 10.2(l)

its affiliates; or (C) while employed and thereafter, publish, release, disclose or deliver or otherwise make available to any third party any Confidential Information by any communication, including oral, documentary, electronic or magnetic information transmittal device or media. Upon termination of employment, the Participant shall return all Confidential Information and all other property of the Company. This obligation of non-disclosure and non-use of information shall continue to exist for so long as such information remains Confidential Information. Provided, however, nothing in this Agreement prohibits or limits the Participant from (i) reporting possible violations of federal securities law or regulation to any governmental agency or entity or (ii) receiving a monetary award from the governmental agency or entity for the information reported.

(b)    Non-Competition. During any period in which the Participant is employed by the Company, and during a period of time after the Participant’s termination of employment (the “Restriction Period”) which, unless otherwise limited by applicable state law, is (i) twenty-four (24) months for Executive Vice Presidents and the President & Chief Executive Officer, and (ii) the greater of the period of severance or twelve (12) months for all other Participants, the Participant will not, without prior written consent of the Company, directly or indirectly seek or obtain a Competitive Position in a Restricted Territory and perform a Restricted Activity with a Competitor, as those terms are defined herein.

(i)    Competitive Position means any employment or performance of services with a Competitor (A) the same as or similar to the services in which Participant performed for the Company in the last twenty-four (24) months of Participant’s employment with Company, or (B) in which the Participant will use any Confidential Information of the Company.

(ii)    Restricted Territory means any geographic area in which the Company does business and in which the Participant provided services in, had responsibility for, had a material presence or influence in, or had access to Confidential Information about, such business, within the thirty-six (36) months prior to the Participant’s termination of employment from the Company.

(iii)    Restricted Activity means any activity for which the Participant had responsibility for the Company within the thirty-six (36) months prior to the termination of the Participant’s employment from the Company or about which the Participant had Confidential Information.

(iv)    Competitor means any entity or individual (other than the Company or its affiliates) engaged in management of network-based managed care plans and programs, or the performance of managed care services, health insurance, long term care insurance, dental, life or disability insurance, behavioral health, vision, flexible spending accounts and COBRA administration or other products or services substantially the same or similar to those offered by the Company while the Participant was employed, or other products or services offered by the Company within twelve (12) months after the termination of Participant’s employment if the Participant had responsibility for, or Confidential Information about, such other products or services while the Participant was employed by the Company.

(v)    The restrictions contained in this subsection (b) shall not apply to attorneys who accept a Competitive Position that consists of practicing law.

(c)    Non-Solicitation of Customers. During any period in which the Participant is employed by the Company, and during the Restriction Period after the Participant’s termination of employment, the Participant will not, either individually or as an employee, partner, consultant, independent contractor, owner, agent, or in any other capacity, directly or indirectly, for a Competitor of the Company as defined in subsection (b) above: (i) solicit business from any client or account of the Company or any of its affiliates with which the Participant had contact, participated in the contact, or responsibility for, or about which the Participant had knowledge of Confidential Information by reason of the Participant’s employment with the Company, (ii) solicit business from any client or account which was pursued by the Company or any of its affiliates and with which the Participant had contact, or responsibility for, or about which the Participant had knowledge of Confidential Information by reason of the Participant’s employment

2019 Stock Option Agreement

5

EXHIBIT 10.2(l)

with the Company, within the twelve (12) month period prior to termination of employment. For purposes of this provision, an individual policyholder in a plan maintained by the Company or by a client or account of the Company under which individual policies are issued, or a certificate holder in such plan under which group policies are issued, shall not be considered a client or account subject to this restriction solely by reason of being such a policyholder or certificate holder.

(d)    Non-Solicitation of Employees. During any period in which the Participant is employed by the Company, and during the Restriction Period after the Participant’s termination of employment, the Participant will not, either individually or as an employee, partner, independent contractor, owner, agent, or in any other capacity, directly or indirectly solicit, hire, attempt to solicit or hire, or participate in any attempt to solicit or hire, for any non-Company affiliated entity, any person who on or during the six (6) months immediately preceding the date of such solicitation or hire is or was an officer or employee of the Company, or whom the Participant was involved in recruiting while the Participant was employed by the Company.

(e)    Non-Disparagement. The Participant agrees that he/she will not, nor will he/she cause or assist any other person to, make any statement to a third party or take any action which is intended to or would reasonably have the effect of disparaging or harming the Company or the business reputation of the Company’s directors, employees, officers and managers. Further, the Participant will not at any time make any verbal or written statement to any media outlet regarding the Company.

8.    Return of Consideration.

(a)    If at any time a Participant breaches any provision of Section 7 or Section 11 then: (i) all unexercised Company stock options under any Designated Plan (defined below) whether or not otherwise vested shall cease to be exercisable and shall immediately terminate; (ii) the Participant shall forfeit any outstanding restricted stock or other outstanding equity award made under any Designated Plan and not otherwise vested on the date of breach; and (iii) the Participant shall pay to the Company (A) for each share of common stock of the Company (“Common Share”) acquired on exercise of an option under a Designated Plan within the 24 months prior to such breach, the excess of the fair market value of a Common Share on the date of exercise over the exercise price, and (B) for each share of restricted stock and/or performance stock that became vested under any Designated Plan within the 24 months prior to such breach, the fair market value (on the date of vesting) of a Common Share. Any amount to be repaid pursuant to this Section 8 shall be held by the Participant in constructive trust for the benefit of the Company and shall, upon written notice from the Company, within 10 days of such notice, be paid by the Participant to the Company with interest from the date such Common Share was acquired or the share of restricted stock became vested, as the case may be, to the date of payment, at 120% of the applicable six month short-term applicable federal rate. Any amount described in clauses (i) and (ii) that the Participant forfeits as a result of a breach of the provisions of Sections 7 or 11 shall not reduce any money damages that would be payable to the Company as compensation for such breach.

(b)    The amount to be repaid pursuant to this Section 8 shall be determined on a gross basis, without reduction for any taxes incurred, as of the date of the realization event, and without regard to any subsequent change in the fair market value of a Common Share. The Company shall have the right to offset such amount against any amounts otherwise owed to the Participant by the Company (whether as wages, vacation pay, or pursuant to any benefit plan or other compensatory arrangement other than any amount pursuant to any nonqualified deferred compensation plan under Section 409A of the Code).

(c)    For purposes of this Section 8, a “Designated Plan” is each stock option, restricted stock, or other equity compensation or long-term incentive compensation plan.

9.    Equitable Relief and Other Remedies. As a condition to this Agreement:

(a)    The Participant acknowledges that each of the provisions of Section 7 and 8 of the Plan are reasonable and necessary to preserve the legitimate business interests of the Company, its present and potential business activities and the economic benefits derived therefrom; that they will not prevent him or her from earning a livelihood in the Participant’s chosen business and are not an undue restraint on the trade of the Participant, or any of the public interests which may be involved.

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EXHIBIT 10.2(l)

(b)    The Participant agrees that beyond the amounts otherwise to be provided under the Plan and this Agreement, the Company will be damaged by a violation of the terms of this Agreement and the amount of such damage may be difficult to measure. The Participant agrees that if the Participant commits or threatens to commit a breach of any of the covenants and agreements contained in Sections 7 or 11 to the extent permitted by applicable law, then the Company shall have the right to seek and obtain all appropriate injunctive and other equitable remedies, without posting bond therefor, except as required by law, in addition to any other rights and remedies that may be available at law or under this Agreement, it being acknowledged and agreed that any such breach would cause irreparable injury to the Company and that money damages would not provide an adequate remedy. Further, if the Participant violates Section 7 hereof the Participant agrees that the period of violation shall be added to the period in which the Participant’s activities are restricted.

(c)    Notwithstanding the foregoing, the Company will not seek injunctive relief to prevent a Participant residing in California from engaging in post termination competition in California under Section 7(b) or (c) of this Agreement, provided that the Company may seek and obtain relief to enforce Section 8 of this Agreement with respect to such Participants.

(d)    The parties agree that the covenants contained herein are severable. If an arbitrator or court shall hold that the duration, scope, area or activity restrictions stated herein are unreasonable under circumstances then existing, or under applicable state law, the parties agree that the maximum duration, scope, area or activity restrictions reasonable and enforceable under such circumstances shall be substituted for the stated duration, scope, area or activity restrictions to the maximum extent permitted by law. The parties further agree that the Company’s rights under Section 8 should be enforced to the fullest extent permitted by law irrespective of whether the Company seeks equitable relief in addition to relief provided therein or if the arbitrator or court deems equitable relief to be inappropriate.

10.    Survival of Provisions. The obligations contained in Sections 7, 8, 9 and Section 11 shall survive the Termination of the Participant’s employment with the Company and shall be fully enforceable thereafter.

11.    Cooperation. Upon the receipt of reasonable notice from the Company (including from outside counsel to the Company), the Participant agrees that while employed by the Company and for two years (or, if longer, for so long as any claim referred to in this Section remains pending) after the termination of Participant’s employment for any reason, the Participant will respond and provide information with regard to matters in which the Participant has knowledge as a result of the Participant’s employment with the Company, and will provide reasonable assistance to the Company, its affiliates and their respective representatives in defense of any claims that may be made against the Company or its affiliates, and will assist the Company and its affiliates in the prosecution of any claims that may be made by the Company or its affiliates, to the extent that such claims may relate to the period of the Participant’s employment with the Company (or any predecessor); provided, that with respect to periods after the termination of the Participant’s employment, the Company shall reimburse the Participant for any out-of-pocket expenses incurred in providing such assistance and if the Participant is required to provide more than ten (10) hours of assistance per week after his termination of employment then the Company shall pay the Participant a reasonable amount of money for his services at a rate agreed to between the Company and the Participant; and provided further that after the Participant’s termination of employment with the Company such assistance shall not unreasonably interfere with the Participant’s business or personal obligations. The Participant agrees to promptly inform the Company if the Participant becomes aware of any lawsuits involving such claims that may be filed or threatened against the Company or its affiliates. The Participant also agrees to promptly inform the Company (to the extent the Participant is legally permitted to do so) if the Participant is asked to assist in any investigation of the Company or its affiliates (or their actions), regardless of whether a lawsuit or other proceeding has then been filed against the Company or its affiliates with respect to such investigation, and shall not do so unless legally required. Provided, however, the Participant is not required to inform the Company of any investigation by a governmental agency or entity resulting from the reporting of possible violations of federal securities law or regulation to any governmental agency or entity, and the Participant may participate in such investigation, without informing the Company.

12.    No Right to Continued Employment. Neither the Option nor any terms contained in this Agreement shall confer upon the Participant any express or implied right to be retained in the employment or service of the Company or any Affiliate for any period, nor restrict in any way the right of the Company, which right is hereby expressly reserved, to terminate the Participant’s employment or service at any time with or without Cause. The

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EXHIBIT 10.2(l)

Participant acknowledges and agrees that any right to exercise the Option is earned only by continuing as an employee of the Company or an Affiliate at the will of the Company or such Affiliate, or satisfaction of any other applicable terms and conditions contained in the Plan and this Agreement, and not through the act of being hired, being granted the Option or acquiring Shares hereunder.

13.    The Plan. This Agreement is subject to all the terms, provisions and conditions of the Plan, which are incorporated herein by reference, and to such regulations as may from time to time be adopted by the Committee. Unless defined herein, capitalized terms are as defined in the Plan. In the event of any conflict between the provisions of the Plan and this Agreement, the provisions of the Plan shall control, and this Agreement shall be deemed to be modified accordingly. The Plan and the prospectus describing the Plan can be found on the Company’s HR intranet. A paper copy of the Plan and the prospectus shall be provided to the Participant upon the Participant’s written request to the Company at Anthem, Inc., 220 Virginia Avenue, Indianapolis, Indiana 46204, Attention: Corporate Secretary, Shareholder Services Department.

14.    Compliance with Laws and Regulations.

(a)    The Option and the obligation of the Company to sell and deliver Shares hereunder shall be subject in all respects to (i) all applicable Federal and state laws, rules and regulations and (ii) any registration, qualification, approvals or other requirements imposed by any government or regulatory agency or body which the Committee shall, in its discretion, determine to be necessary or applicable. Moreover, the Option may not be exercised if its exercise, or the receipt of Shares pursuant thereto, would be contrary to applicable law. If at any time the Company determines, in its discretion, that the listing, registration or qualification of Shares upon any national securities exchange or under any state or Federal law, or the consent or approval of any governmental regulatory body, is necessary or desirable, the Company shall not be required to deliver any certificates for Shares to the Participant or any other person pursuant to this Agreement unless and until such listing, registration, qualification, consent or approval has been effected or obtained, or otherwise provided for, free of any conditions not acceptable to the Company.

(b)    The Shares received upon the exercise of the Option shall have been registered under the Securities Act of 1933 (“Securities Act”). If the Participant is an “affiliate” of the Company, as that term is defined in Rule 144 under the Securities Act (“Rule 144”), the Participant may not sell the Shares received except in compliance with Rule 144. Certificates representing Shares issued to an “affiliate” of the Company may bear a legend setting forth such restrictions on the disposition or transfer of the Shares as the Company deems appropriate to comply with Federal and state securities laws.

(c)    If at the time of exercise of all or part of the Option, the Shares are not registered under the Securities Act, and/or there is no current prospectus in effect under the Securities Act with respect to the Shares, the Participant shall execute, prior to the delivery of any Shares to the Participant by the Company pursuant to this Agreement, an agreement (in such form as the Company may specify) in which the Participant represents and warrants that the Participant is purchasing or acquiring the shares acquired under this Agreement for the Participant's own account, for investment only and not with a view to the resale or distribution thereof, and represents and agrees that any subsequent offer for sale or distribution of any kind of such Shares shall be made only pursuant to either (i) a registration statement on an appropriate form under the Securities Act, which registration statement has become effective and is current with regard to the Shares being offered or sold, or (ii) a specific exemption from the registration requirements of the Securities Act, but in claiming such exemption the Participant shall, prior to any offer for sale of such Shares, obtain a prior favorable written opinion, in form and substance satisfactory to the Company, from counsel for or approved by the Company, as to the applicability of such exemption thereto.

15.    Notices. All notices by the Participant or the Participant’s assignees shall be addressed to Anthem, Inc., 220 Virginia Avenue, Indianapolis, Indiana 46204, Attention: Stock Administration, or such other address as the Company may from time to time specify. All notices to the Participant shall be addressed to the Participant at the Participant’s address in the Company's records.

16.    Other Plans. The Participant acknowledges that any income derived from the exercise of the Option shall not affect the Participant’s participation in, or benefits under, any other benefit plan or other contract or arrangement maintained by the Company or any Affiliate.

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EXHIBIT 10.2(l)

17.    Recoupment Policy for Incentive Compensation. The Company's Recoupment Policy for Incentive Compensation, as may be amended from time to time, shall apply to the Option, any Shares acquired upon exercise of the Option and any profits realized from the sale of such Shares to the extent that the Participant is covered by such policy. If the Participant is covered by such policy, the policy may apply to recoup the Option, any Shares acquired upon exercise of the Option or profits realized from the sale of Shares previously covered by the Option either before, on or after the date on which the Participant becomes subject to such policy.

ANTHEM, INC.

By: ______________________________

Printed: Lewis Hay III

Its: Chair, Compensation Committee of the Board of Directors

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EX-10.2(M)

EXHIBIT 10.2(m)

Schedule A

Notice of Restricted Stock Unit Grant

Participant:	[●]
Company:	Anthem, Inc.
Notice:	You have been granted the following award of restricted stock units of common stock of the Company in accordance with the terms of the Plan and the attached Restricted Stock Unit Award Agreement.
Plan:	2017 Anthem Incentive Compensation Plan
Grant:	Grant Date: [●] Number of Restricted Stock Units: [●]
Period of Restriction:	The Period of Restriction applicable to the number of your Restricted Stock Units listed in the “Shares” column below, and any related Dividend Equivalents, shall commence on the Grant Date and shall lapse on the date listed in the “Lapse Date” column below.
	Shares	Lapse Date
	In the event that a Change of Control (as defined in the Plan) occurs before your Termination, your Restricted Stock Unit Grant will remain subject to the terms of this Agreement, unless the successor company does not assume the Restricted Stock Unit Grant. If the successor company does not assume the Restricted Stock Unit Grant, then the Period of Restriction shall immediately lapse upon a Change of Control and the Shares covered by the award shall be immediately delivered upon the Change of Control, provided that in the event that the Restricted Stock Unit Grant is deferred compensation within the meaning of Code Section 409A, such Shares shall only be delivered upon the Change of Control if such Change of Control is a “change in control event” within the meaning of Code Section 409A and the delivery is made in accordance with Treasury Regulation 1-409A-3(j)(ix).
Acceptance:	In order to accept your Restricted Stock Units, you must electronically accept this Agreement through the Company’s broker at any time within ninety (90) days after the Grant Date. To effect your acceptance, please follow the instructions included with your grant materials. Acceptance of the Agreement includes acceptance of the terms and conditions of the Plan. If you do not timely and electronically accept this Agreement, this Agreement will be null and void as of the 90th day after the Grant Date and you will have no right or claim to the Restricted Stock Units described above.

2019 Restricted Stock Unit Agreement

Restricted Stock Unit Award Agreement

This Restricted Stock Unit Award Agreement (this “Agreement”) dated as of the Grant Date (the “Grant Date”) set forth in the Notice of Restricted Stock Unit Grant attached as Schedule A hereto (the “Grant Notice”) is made between Anthem, Inc. (the “Company”) and the Participant set forth in the Grant Notice. The Grant Notice is included in and made part of this Agreement.

1.Period of Restriction. The Period of Restriction with respect to the Restricted Stock Units shall be as set forth in the Grant Notice (the “Period of Restriction”). The Participant acknowledges that prior to the expiration of the applicable portion of the Period of Restriction, the Restricted Stock Units may not be sold, transferred, pledged, assigned, encumbered, alienated, hypothecated or otherwise disposed of (whether voluntary or involuntary or by operation of law by judgment, levy, attachment, garnishment or any other legal or equitable proceedings (including bankruptcy)). Upon the expiration of the applicable portion of the Period of Restriction described in the attached Grant Notice, the restrictions set forth in this Agreement with respect to the Restricted Stock Units theretofore subject to such expired Period of Restriction shall lapse and the Shares covered by the related portion of the award shall be immediately delivered, except as may be provided in accordance with Sections 8 and 15 hereof.

2.    Ownership. Upon expiration of the applicable portion of the Period of Restriction described in the attached Grant Notice, the Company shall transfer the Shares covered by the related portion of the award to the Participant’s account with the Company’s captive broker.

3.    Termination.

(a)    Retirement. If the Participant’s Termination is due to Retirement (for purposes of this Agreement, defined as the Participant’s Termination after attaining age fifty-five (55) with at least ten (10) completed years of service or after attaining age sixty-five (65)), the restrictions upon the Restricted Stock Units shall continue to lapse throughout the Period of Restriction and the Shares covered by the related portion of the Restricted Stock Units shall continue to be delivered upon the applicable Lapse Date; provided, however, that if the Participant’s Termination due to Retirement is during the calendar year of the Grant Date, the Restricted Stock Units shall be forfeited on a pro-rata basis, measured by the number of completed full months in that calendar year during which the Participant was employed by the Company or an Affiliate (e.g., if the Participant’s Retirement occurs in September, 33.3% (or 4/12) of the Restricted Stock Units will be forfeited), and the Period of Restriction on the non-forfeited portion of the Restricted Stock Units shall continue to lapse throughout the Period of Restriction described in the attached Grant Notice and the Shares covered by the related portion of the Restricted Stock Units shall continue to be delivered upon the applicable Lapse Date.¹ 

(b)    Death and Disability. If the Participant’s Termination is due to death or Disability (for purposes of this Agreement, as defined in the applicable Anthem Long-Term Disability Plan), then the Period of Restriction shall immediately lapse, causing any restrictions which would otherwise remain on the Restricted Stock Units to immediately lapse and the Shares covered by the Restricted Stock Units shall be immediately delivered.

(c)    Without Cause. Unless 3(a) is applicable, if the Participant’s Termination is by the Company or an Affiliate without Cause (for purposes of this Agreement, defined as a violation of “conduct” as such term is defined in the Anthem HR Corrective Action Policy and if the Participant participates in the Anthem, Inc. Executive Agreement Plan (the "Agreement Plan"), the Key Associate Agreement or the Key Sales Associate Agreement also as defined in that plan or agreement) and the Participant is receiving severance under the Agreement Plan, the Anthem Supplemental Unemployment Benefit Plan, the Anthem Excess Termination Benefit Plan, the Key Associate Agreement or the Key Sales Associate Agreement and any portion of the Period of Restriction has not lapsed as of the Participant’s Termination, the Period of Restriction shall continue to lapse through the earlier of (A) the last day of the period for which the Participant is receiving severance or (B) the last Lapse Date in the schedule set forth in the Grant Notice.

(d)    Other Terminations. Unless Section 3(c) applies, if the Participant’s Termination is by the Company or an Affiliate or by the Participant for any reason other than death, Disability or Retirement,

¹This retirement provision is deleted in non-annual retention grants.

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2019 Restricted Stock Unit Agreement

then all Restricted Stock Units for which the Period of Restriction had not lapsed prior to the date of such Termination shall be immediately forfeited.

(e)     Termination after Change of Control. Notwithstanding any other provision of the Agreement, including Section 3(c), if after a Change of Control the Participant’s Termination is (i) by the Company or an Affiliate without Cause (for purposes of this Agreement, defined as a violation of “conduct” as such term is defined in the Anthem HR Corrective Action Policy and if the Participant participates in the Agreement Plan, the Key Associate Agreement or the Key Sales Associate Agreement also as defined in that plan or agreement) or (ii) if the Participant participates in the Agreement Plan, by the Participant for Good Reason (as defined in the Agreement Plan), then the Period of Restriction on all Restricted Stock Units shall immediately lapse, causing any restrictions which would otherwise remain on the Restricted Stock Units to immediately lapse and the Shares covered by the Restricted Stock Units shall be immediately delivered. Notwithstanding any provision of this Agreement to the contrary, in the event that the restrictions on any Restricted Stock Units lapse under any provision of this Section 3 by reason of any Termination and such Termination occurs within the two year period following a Change of Control that is a “change in control event” within the meaning of Code Section 409A, the Shares subject to the Participant’s Restricted Stock Units shall be delivered to the Participant immediately upon such Termination.

4.    Transferability of the Restricted Stock Units. The Participant shall have the right to appoint any individual or legal entity in writing, on a Designation of Beneficiary form, as his/her beneficiary to receive any Restricted Stock Units (to the extent not previously terminated or forfeited) under this Agreement upon the Participant’s death. Such designation under this Agreement may be revoked by the Participant at any time and a new beneficiary may be appointed by the Participant by execution and submission to the Company, or its designee, of a revised Designation of Beneficiary form to this Agreement. In order to be effective, a designation of beneficiary must be completed by the Participant on the Designation of Beneficiary form and received by the Company, or its designee, prior to the date of the Participant’s death. If the Participant dies without such designation, the Restricted Stock Units will become part of the Participant’s estate.

5.    Dividend Equivalents. In the event the Company declares a dividend on Shares (as defined in the Plan), for each unvested Restricted Stock Unit on the dividend payment date, the Participant shall be credited with a Dividend Equivalent, payable in cash, with a value equal to the value of the declared dividend. The Dividend Equivalents shall be subject to the same restrictions as the unvested Restricted Stock Units to which they relate. No interest or other earnings shall be credited on the Dividend Equivalents. Subject to continued employment with the Company and Affiliates, the restrictions with respect to the Dividend Equivalents shall lapse at the same time and in the same proportion as the initial award of Restricted Stock Units. No additional Dividend Equivalents shall be accrued for the benefit of the Participant with respect to record dates occurring prior to, or with respect to record dates occurring on or after the date, if any, on which the Participant has forfeited the Restricted Stock Units or any Restricted Stock Units have been settled. For any specified employee, any Dividend Equivalents subject to Code Section 409A and payable upon a termination of employment shall be subject to a six month delay. The Dividend Equivalents shall be subject to all such other provisions set forth herein, and may be used to satisfy any or all obligations for the payment of any tax attributable to the Dividend Equivalents and/or Restricted Stock Units.

6.    Taxes and Withholdings. Upon the expiration of the applicable portion of the Period of Restriction (and delivery of the underlying Shares), or as of which the value of any Restricted Stock Units first becomes includible in the Participant’s gross income for income tax purposes, the Participant shall satisfy all obligations for the payment of any tax attributable to the Restricted Stock Units. The Participant shall notify the Company if the Participant wishes to pay the Company in cash, check or with shares of Anthem common stock already owned for the satisfaction of any taxes of any kind required by law to be withheld with respect to such Restricted Stock Units. Any such election made by the Participant must be irrevocable, made in writing, signed by the Participant, and shall be subject to any restrictions or limitations that the Compensation Committee of the Board of Directors of the Company (“Committee”), in its sole discretion, deems appropriate. If the Participant does not notify the Company in writing at least 14 days prior to the applicable lapse of the Period of Restriction, the Committee is authorized to take any such other action as may be necessary or appropriate, as determined by the Committee, to satisfy all obligations for the payment of such taxes. Such other actions may include withholding the required amounts from other compensation payable to the Participant, a sell-to-cover transaction or such other method determined by the Committee, in its discretion.

7.    Restrictive Covenants. For purposes of Section 7, 8, 9, 10 and 11 of this Agreement, Company shall mean Anthem, Inc. and its subsidiaries and affiliates. The Participant acknowledges that s/he has the right to consult with counsel at the Participant’s sole expense. As a condition to receipt of the Restricted Stock Unit

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2019 Restricted Stock Unit Agreement

Grant made under this Agreement and/or award of vested Restricted Stock Units, which the Participant and the Company agree is fair and reasonable consideration, the Participant agrees as follows:

(a)    Confidentiality.

i.The Participant recognizes that the Company derives substantial economic value from information created and used in its business which is not generally known by the public, including, but not limited to, plans, designs, concepts, computer programs, formulae, and equations; product fulfillment and supplier information; customer and supplier lists, and confidential business practices of the Company, its affiliates and any of its customers, vendors, business partners or suppliers; profit margins and the prices and discounts the Company obtains or has obtained or at which it sells or has sold or plans to sell its products or services (except for public pricing lists); manufacturing, assembling, labor and sales plans and costs; business and marketing plans, ideas, or strategies; confidential financial performance and projections; employee compensation; employee staffing and recruiting plans and employee personal information; and other confidential concepts and ideas related to the Company’s business (collectively, “Confidential Information”). The Participant expressly acknowledges and agrees that by virtue of his/her employment with the Company, the Participant will have access and will use in the course of the Participant’s duties certain Confidential Information and that Confidential Information constitutes trade secrets and confidential and proprietary business information of the Company, all of which is the exclusive property of the Company. For purposes of this Agreement, Confidential Information includes the foregoing and other information protected under the Indiana Uniform Trade Secrets Act (the “Act”), or to any comparable protection afforded by applicable law, but does not include information that the Participant establishes by clear and convincing evidence is or may become known to the Participant or to the public from sources outside the Company and through means other than a breach of this Agreement. Notwithstanding the foregoing, in accordance with the Defend Trade Secrets Act of 2016, the Participant will not be held criminally or civilly liable under any federal or state trade secret law for the disclosure of a trade secret that: (A) is made (1) in confidence to a federal, state, or local government official, either directly or indirectly, or to an attorney; and (2) solely for the purpose of reporting or investigating a suspected violation of law; or (B) is made in a complaint or other document that is filed under seal in a lawsuit or other proceeding. If the Participant files a lawsuit for retaliation by the Company for reporting a suspected violation of law, the Participant may disclose the Company’s trade secrets to his/her attorney and use the trade secret information in the court proceeding if the Participant (A) files any document containing the trade secret under seal; and (B) does not disclose the trade secret, except pursuant to court order.

ii.The Participant agrees that the Participant will not for himself or herself or for any other person or entity, directly or indirectly, without the prior written consent of the Company, while employed by the Company and thereafter: (A) use Confidential Information for the benefit of any person or entity other than the Company or its affiliates; (B) remove, copy, duplicate or otherwise reproduce any document or tangible item embodying or pertaining to any of the Confidential Information, except as required to perform the Participant’s duties for the Company or its affiliates; or (C) while employed and thereafter, publish, release, disclose or deliver or otherwise make available to any third party any Confidential Information by any communication, including oral, documentary, electronic or magnetic information transmittal device or media. Upon termination of employment, the Participant shall return all Confidential Information and all other property of the Company. This obligation of non-disclosure and non-use of information shall continue to exist for so long as such information remains Confidential Information. Provided, however, nothing in this Agreement prohibits or limits the Participant from (i) reporting possible violations of federal securities law or regulation to any governmental agency or entity or (ii) receiving a monetary award from the governmental agency or entity for the information reported.

(b)    Non-Competition. During any period in which the Participant is employed by the Company, and during a period of time after the Participant’s termination of employment (the “Restriction Period”) which, unless otherwise limited by applicable state law, is (i) twenty-four (24) months for Executive Vice Presidents and the President & Chief Executive Officer, and (ii) the greater of the period of severance or twelve (12) months for all other Participants, the Participant will not, without prior written consent of the Company, directly or indirectly seek

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2019 Restricted Stock Unit Agreement

or obtain a Competitive Position in a Restricted Territory and perform a Restricted Activity with a Competitor, as those terms are defined herein.

(i.)Competitive Position means any employment or performance of services with a Competitor (A) the same as or similar to the services in which Participant performed for the Company in the last twenty-four (24) months of Participant’s employment with Company, or (B) in which the Participant will use any Confidential Information of the Company.

(ii.)Restricted Territory means any geographic area in which the Company does business and in which the Participant provided services in, had responsibility for, had a material presence or influence in, or had access to Confidential Information about, such business, within the thirty-six (36) months prior to the Participant’s termination of employment from the Company.

(iii.)Restricted Activity means any activity for which the Participant had responsibility for the Company within the thirty-six (36) months prior to the termination of the Participant’s employment from the Company or about which the Participant had Confidential Information.

(iv.)Competitor means any entity or individual (other than the Company or its affiliates) engaged in management of network-based managed care plans and programs, or the performance of managed care services, health insurance, long term care insurance, dental, life or disability insurance, behavioral health, vision, flexible spending accounts and COBRA administration or other products or services substantially the same or similar to those offered by the Company while the Participant was employed, or other products or services offered by the Company within twelve (12) months after the termination of Participant’s employment if the Participant had responsibility for, or Confidential Information about, such other products or services while the Participant was employed by the Company.

(v.)The restrictions contained in this subsection (b) shall not apply to attorneys who accept a Competitive Position that consists of practicing law.

(c)    Non-Solicitation of Customers. During any period in which the Participant is employed by the Company, and during the Restriction Period after the Participant’s termination of employment, the Participant will not, either individually or as an employee, partner, consultant, independent contractor, owner, agent, or in any other capacity, directly or indirectly, for a Competitor of the Company as defined in subsection (b) above: (i) solicit business from any client or account of the Company or any of its affiliates with which the Participant had contact, participated in the contact, or responsibility for, or about which the Participant had knowledge of Confidential Information by reason of the Participant’s employment with the Company, (ii) solicit business from any client or account which was pursued by the Company or any of its affiliates and with which the Participant had contact, or responsibility for, or about which the Participant had knowledge of Confidential Information by reason of the Participant’s employment with the Company, within the twelve (12) month period prior to termination of employment. For purposes of this provision, an individual policyholder in a plan maintained by the Company or by a client or account of the Company under which individual policies are issued, or a certificate holder in such plan under which group policies are issued, shall not be considered a client or account subject to this restriction solely by reason of being such a policyholder or certificate holder.

(d)    Non-Solicitation of Employees. During any period in which the Participant is employed by the Company, and during the Restriction Period after the Participant’s termination of employment, the Participant will not, either individually or as an employee, partner, independent contractor, owner, agent, or in any other capacity, directly or indirectly solicit, hire, attempt to solicit or hire, or participate in any attempt to solicit or hire, for any non-Company affiliated entity, any person who on or during the six (6) months immediately preceding the date of such solicitation or hire is or was an officer or employee of the Company, or whom the Participant was involved in recruiting while the Participant was employed by the Company.

(e)    Non-Disparagement. The Participant agrees that he/she will not, nor will he/she cause or assist any other person to, make any statement to a third party or take any action which is intended to or would reasonably have the effect of disparaging or harming the Company or the business reputation of the Company’s directors,

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2019 Restricted Stock Unit Agreement

employees, officers and managers. Further, the Participant will not at any time make any verbal or written statement to any media outlet regarding the Company.

8.    Return of Consideration.

(a)    If at any time a Participant breaches any provision of Section 7 or Section 11 then: (i) all unexercised Company stock options under any Designated Plan (defined below) whether or not otherwise vested shall cease to be exercisable and shall immediately terminate; (ii) the Participant shall forfeit any outstanding restricted stock or other outstanding equity award made under any Designated Plan and not otherwise vested on the date of breach; and (iii) the Participant shall pay to the Company (A) for each share of common stock of the Company (“Common Share”) acquired on exercise of an option under a Designated Plan within the 24 months prior to such breach, the excess of the fair market value of a Common Share on the date of exercise over the exercise price, and (B) for each share of restricted stock and/or performance stock that became vested under any Designated Plan within the 24 months prior to such breach, the fair market value (on the date of vesting) of a Common Share. Any amount to be repaid pursuant to this Section 8 shall be held by the Participant in constructive trust for the benefit of the Company and shall, upon written notice from the Company, within 10 days of such notice, be paid by the Participant to the Company with interest from the date such Common Share was acquired or the share of restricted stock became vested, as the case may be, to the date of payment, at 120% of the applicable six month short-term applicable federal rate. Any amount described in clauses (i) and (ii) that the Participant forfeits as a result of a breach of the provisions of Sections 7 or 11 shall not reduce any money damages that would be payable to the Company as compensation for such breach.

(b)    The amount to be repaid pursuant to this Section 8 shall be determined on a gross basis, without reduction for any taxes incurred, as of the date of the realization event, and without regard to any subsequent change in the fair market value of a Common Share. The Company shall have the right to offset such amount against any amounts otherwise owed to the Participant by the Company (whether as wages, vacation pay, or pursuant to any benefit plan or other compensatory arrangement other than any amount pursuant to any nonqualified deferred compensation plan under Section 409A of the Code).

(c)    For purposes of this Section 8, a “Designated Plan” is each stock option, restricted stock, or other equity compensation or long-term incentive compensation plan.

9.    Equitable Relief and Other Remedies. As a condition to this Agreement:

(a)    The Participant acknowledges that each of the provisions of Section 7 and 8 of the Plan are reasonable and necessary to preserve the legitimate business interests of the Company, its present and potential business activities and the economic benefits derived therefrom; that they will not prevent him or her from earning a livelihood in the Participant’s chosen business and are not an undue restraint on the trade of the Participant, or any of the public interests which may be involved.

(b)    The Participant agrees that beyond the amounts otherwise to be provided under the Plan and this Agreement, the Company will be damaged by a violation of the terms of this Agreement and the amount of such damage may be difficult to measure. The Participant agrees that if the Participant commits or threatens to commit a breach of any of the covenants and agreements contained in Sections 7 or 11 to the extent permitted by applicable law, then the Company shall have the right to seek and obtain all appropriate injunctive and other equitable remedies, without posting bond therefor, except as required by law, in addition to any other rights and remedies that may be available at law or under this Agreement, it being acknowledged and agreed that any such breach would cause irreparable injury to the Company and that money damages would not provide an adequate remedy. Further, if the Participant violates Section 7 hereof the Participant agrees that the period of violation shall be added to the period in which the Participant’s activities are restricted.

(c)    Notwithstanding the foregoing, the Company will not seek injunctive relief to prevent a Participant residing in California from engaging in post termination competition in California under Section 7(b) or (c) of this Agreement, provided that the Company may seek and obtain relief to enforce Section 8 of this Agreement with respect to such Participants.

(d)    The parties agree that the covenants contained herein are severable. If an arbitrator or court shall hold that the duration, scope, area or activity restrictions stated herein are unreasonable under circumstances

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2019 Restricted Stock Unit Agreement

then existing, or under applicable state law, the parties agree that the maximum duration, scope, area or activity restrictions reasonable and enforceable under such circumstances shall be substituted for the stated duration, scope, area or activity restrictions to the maximum extent permitted by law. The parties further agree that the Company’s rights under Section 8 should be enforced to the fullest extent permitted by law irrespective of whether the Company seeks equitable relief in addition to relief provided therein or if the arbitrator or court deems equitable relief to be inappropriate.

10.    Survival of Provisions. The obligations contained in Sections 7, 8, 9 and Section 11 shall survive the Termination of the Participant’s employment with the Company and shall be fully enforceable thereafter.

11.    Cooperation. Upon the receipt of reasonable notice from the Company (including from outside counsel to the Company), the Participant agrees that while employed by the Company and for two years (or, if longer, for so long as any claim referred to in this Section remains pending) after the termination of Participant’s employment for any reason, the Participant will respond and provide information with regard to matters in which the Participant has knowledge as a result of the Participant’s employment with the Company, and will provide reasonable assistance to the Company, its affiliates and their respective representatives in defense of any claims that may be made against the Company or its affiliates, and will assist the Company and its affiliates in the prosecution of any claims that may be made by the Company or its affiliates, to the extent that such claims may relate to the period of the Participant’s employment with the Company (or any predecessor); provided, that with respect to periods after the termination of the Participant’s employment, the Company shall reimburse the Participant for any out-of-pocket expenses incurred in providing such assistance and if the Participant is required to provide more than ten (10) hours of assistance per week after his termination of employment then the Company shall pay the Participant a reasonable amount of money for his services at a rate agreed to between the Company and the Participant; and provided further that after the Participant’s termination of employment with the Company such assistance shall not unreasonably interfere with the Participant’s business or personal obligations. The Participant agrees to promptly inform the Company if the Participant becomes aware of any lawsuits involving such claims that may be filed or threatened against the Company or its affiliates. The Participant also agrees to promptly inform the Company (to the extent the Participant is legally permitted to do so) if the Participant is asked to assist in any investigation of the Company or its affiliates (or their actions), regardless of whether a lawsuit or other proceeding has then been filed against the Company or its affiliates with respect to such investigation, and shall not do so unless legally required. Provided, however, the Participant is not required to inform the Company of any investigation by a governmental agency or entity resulting from the reporting of possible violations of federal securities law or regulation to any governmental agency or entity, and the Participant may participate in such investigation, without informing the Company.

12.    No Rights as a Shareholder. The Participant shall have no rights of a shareholder (including, without limitation, dividend and voting rights) with respect to the Restricted Stock Units, for record dates occurring on or after the Grant Date and prior to the date any such Restricted Stock Units vest in accordance with this Agreement.

13.    No Right to Continued Employment. Neither the Restricted Stock Units nor any terms contained in this Agreement shall confer upon the Participant any express or implied right to be retained in the employment or service of the Company or any Affiliate for any period, nor restrict in any way the right of the Company, which right is hereby expressly reserved, to terminate the Participant’s employment or service at any time for any reason. The Participant acknowledges and agrees that any right to have restrictions on the Restricted Stock Units lapse is earned only by continuing as an employee of the Company or an Affiliate at the will of the Company or such Affiliate, or satisfaction of any other applicable terms and conditions contained in the Plan and this Agreement, and not through the act of being hired, being granted the Restricted Stock Units or acquiring Shares hereunder.

14.    The Plan. This Agreement is subject to all the terms, provisions and conditions of the Plan, which are incorporated herein by reference, and to such regulations as may from time to time be adopted by the Committee. Unless defined herein, capitalized terms are as defined in the Plan. In the event of any conflict between the provisions of the Plan and this Agreement, the provisions of the Plan shall control, and this Agreement shall be deemed to be modified accordingly. The Plan and the prospectus describing the Plan can be found on the Company’s HR intranet. A paper copy of the Plan and the prospectus shall be provided to the Participant upon the Participant’s written request to the Company at Anthem, Inc., 220 Virginia Avenue, Indianapolis, Indiana 46204, Attention: Corporate Secretary, Shareholder Services Department.

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2019 Restricted Stock Unit Agreement

15.    Compliance with Laws and Regulations.

(a)    The Restricted Stock Units and the obligation of the Company to deliver Shares hereunder shall be subject in all respects to (i) all applicable Federal and state laws, rules and regulations and (ii) any registration, qualification, approvals or other requirements imposed by any government or regulatory agency or body which the Committee shall, in its discretion, determine to be necessary or applicable. Moreover, the Company shall not deliver any certificates for Shares to the Participant or any other person pursuant to this Agreement if doing so would be contrary to applicable law. If at any time the Company determines, in its discretion, that the listing, registration or qualification of Shares upon any national securities exchange or under any state or Federal law, or the consent or approval of any governmental regulatory body, is necessary or desirable, the Company shall not be required to deliver any certificates for Shares to the Participant or any other person pursuant to this Agreement unless and until such listing, registration, qualification, consent or approval has been effected or obtained, or otherwise provided for, free of any conditions not acceptable to the Company.

(b)    The Shares received upon the expiration of the applicable portion of the Period of Restriction shall have been registered under the Securities Act of 1933 (“Securities Act”). If the Participant is an “affiliate” of the Company, as that term is defined in Rule 144 under the Securities Act (“Rule 144”), the Participant may not sell the Shares received except in compliance with Rule 144. Certificates representing Shares issued to an “affiliate” of the Company may bear a legend setting forth such restrictions on the disposition or transfer of the Shares as the Company deems appropriate to comply with Federal and state securities laws.

(c)    If, at any time, the Shares are not registered under the Securities Act, and/or there is no current prospectus in effect under the Securities Act with respect to the Shares, the Participant shall execute, prior to the delivery of any Shares to the Participant by the Company pursuant to this Agreement, an agreement (in such form as the Company may specify) in which the Participant represents and warrants that the Participant is purchasing or acquiring the shares acquired under this Agreement for the Participant’s own account, for investment only and not with a view to the resale or distribution thereof, and represents and agrees that any subsequent offer for sale or distribution of any kind of such Shares shall be made only pursuant to either (i) a registration statement on an appropriate form under the Securities Act, which registration statement has become effective and is current with regard to the Shares being offered or sold, or (ii) a specific exemption from the registration requirements of the Securities Act, but in claiming such exemption the Participant shall, prior to any offer for sale of such Shares, obtain a prior favorable written opinion, in form and substance satisfactory to the Company, from counsel for or approved by the Company, as to the applicability of such exemption thereto.

16.    Code Section 409A Compliance. Except with respect to Participants who are Retirement eligible or become Retirement eligible before the calendar year containing the second Lapse Date as shown on the Grant Notice, it is intended that this Agreement meet the short-term deferral exception from Code Section 409A. This Agreement and the Plan shall be administered in a manner consistent with this intent and any provision that would cause the Agreement or Plan to fail to satisfy this exception shall have no force and effect. Notwithstanding anything contained herein to the contrary, Shares in respect of any Restricted Stock Units that (a) constitute “nonqualified deferred compensation” as defined under Code Section 409A and (b) vest as a consequence of the Participant’s Termination shall not be delivered until the date that the Participant incurs a “separation from service” within the meaning of Code Section 409A (or, if the Participant is a “specified employee” within the meaning of Code Section 409A and the regulations promulgated thereunder, the date that is six months following the date of such “separation from service” (or death, if earlier)). In addition, each amount to be paid or benefit to be provided to the Participant pursuant to this Agreement that constitutes deferred compensation subject to Code Section 409A, shall be construed as a separate identified payment for purposes of Code Section 409A.

17.    Notices. All notices by the Participant or the Participant’s assignees shall be addressed to Anthem, Inc., 220 Virginia Avenue, Indianapolis, Indiana 46204, Attention: Stock Administration, or such other address as the Company may from time to time specify. All notices to the Participant shall be addressed to the Participant at the Participant’s address in the Company’s records.

18.    Other Plans. The Participant acknowledges that any income derived from the Restricted Stock Units shall not affect the Participant’s participation in, or benefits under, any other benefit plan or other contract or arrangement maintained by the Company or any Affiliate.

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2019 Restricted Stock Unit Agreement

19.    Recoupment Policy for Incentive Compensation. The Company's Recoupment Policy for Incentive Compensation, as may be amended from time to time, shall apply to the Restricted Stock Units, any Shares delivered hereunder and any profits realized on the sale of such Shares to the extent that the Participant is covered by such policy. If the Participant is covered by such policy, the policy may apply to recoup Restricted Stock Units awarded, any Shares delivered hereunder or profits realized on the sale of such Shares either before, on or after the date on which the Participant becomes subject to such policy.

ANTHEM, INC.

By:     
Printed: Lewis Hay III
Its: Chair, Compensation Committee
of the Board of Directors

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EX-10.2(N)

EXHIBIT 10.2(n)

Schedule A

Notice of Performance Stock Unit Grant

Participant:	[●]
Company:	Anthem, Inc.
Notice:	You have been granted the following award of performance stock units of common stock of the Company in accordance with the terms of the Plan and the attached Performance Stock Unit Agreement.
Plan:	2017 Anthem Incentive Compensation Plan
Grant:	Grant Date: [●] Number of Performance Stock Units: [●]
Performance Period:	The Performance Period is the three calendar year period that begins on the January 1 of the calendar year that includes the Grant Date. Subject to achievement of the performance measures described below, the number of your Performance Stock Units listed in the “Shares” column, and any related Dividend Equivalents shall vest on the later of the date listed in the “Vesting Date” column or the date the Compensation Committee of the Board of Directors of Anthem, Inc. certifies the performance results. Unless otherwise provided in the Agreement, you must be employed on the Vesting Date to receive any Performance Stock Units payable under the Agreement. Achievement of the performance measures described below may increase or decrease the total number of Performance Stock Units covered by the Grant and any related Dividend Equivalents that vest on the Vesting Date.
	Shares		Vesting Date
	Achievement of the following performance measures must be approved by the Compensation Committee of the Board of Directors of Anthem, Inc. For the Cumulative Adjusted Net Income performance measure, you will earn between 0% and [●]% (share amounts will be interpolated) of three-fourths of the number of Performance Stock Units originally covered by the Grant. For the Cumulative Operating Revenue performance measure, you will earn between 0% and [●]% of one-fourth of the number of Performance Stock Units originally covered by the Grant. The total number of Performance Stock Units, as adjusted for achievement of the performance measures, will vest on the date listed in the Vesting Date column above. If achievement of any performance measure results in a number of shares awarded that is more or less than 100%, then the number of Dividend Equivalents payable upon the Vesting Date shall be adjusted accordingly.
	Cumulative Adjusted Net Income (2019-2021)	Threshold	Target	Maximum
	Percent of Shares Vesting

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EXHIBIT 10.2(n)

	Cumulative Operating Revenue* (2019-2021)
	Percent of Shares Vesting
	*All Health Insurer Fee revenue will be excluded from Cumulative Operating Revenue
	In the event that a Change of Control (as defined in the Plan) occurs before your Termination, your Performance Stock Unit Grant will remain subject to the terms of this Agreement, unless the successor company does not assume the Performance Stock Unit Grant. If the successor company does not assume the Performance Stock Unit Grant, then the Performance Stock Units shall immediately vest upon a Change of Control and the Shares covered by the award shall be immediately delivered upon the Change of Control, provided that in the event that the Performance Stock Units are deferred compensation within the meaning of Code Section 409A, such Stock Units shall only be delivered upon the Change of Control if such Change of Control is a “change in control event” within the meaning of Code Section 409A and the delivery is made in accordance with Treasury Regulation 1-409A-3(j)(ix).
Acceptance:	In order to accept your Performance Stock Units, you must electronically accept this Agreement through the Company’s broker at any time within ninety (90) days after the Grant Date. To effect your acceptance, please follow the instructions included with your grant materials. Acceptance of the Agreement includes acceptance of the terms and conditions of the Plan. If you do not timely and electronically accept this Agreement, this Agreement will be null and void as of the 90th day after the Grant Date and you will have no right or claim to the Performance Stock Units described above.

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Performance Stock Unit Award Agreement

This Performance Stock Unit Award Agreement (this “Agreement”) dated as of the Grant Date (the “Grant Date”) set forth in the Notice of Performance Stock Unit Grant attached as Schedule A hereto (the “Grant Notice”) is made between Anthem, Inc. (the “Company”) and the Participant set forth in the Grant Notice. The Grant Notice is included in and made part of this Agreement.

1.Performance Period. The Performance Period with respect to the Performance Stock Units shall be as set forth in the Grant Notice (the “Performance Period”). The Participant acknowledges that the Performance Stock Units may not be sold, transferred, pledged, assigned, encumbered, alienated, hypothecated or otherwise disposed of (whether voluntary or involuntary or by operation of law by judgment, levy, attachment, garnishment or any other legal or equitable proceedings (including bankruptcy)). Upon the completion of the applicable portion of the Performance Period and subject to the performance measure described in the attached Grant Notice, the restrictions set forth in this Agreement with respect to the Performance Stock Units theretofore subject to such completed Performance Period shall lapse and the Shares covered by the related portion of the award shall be immediately delivered, except as may be provided in accordance with Sections 8 and 15 hereof.

2.    Ownership. Upon expiration of the applicable portion of the Performance Period and subject to the performance measure described in the attached Grant Notice, the Company shall transfer the Shares covered by the related portion of the award to the Participant’s account with the Company’s captive broker.

3.    Termination.

(a)    Retirement. If the Participant’s Termination is due to Retirement (for purposes of this Agreement, defined as the Participant’s Termination after attaining age fifty-five (55) with at least ten (10) completed years of service) or after attaining age sixty-five (65), the Participant shall become vested in a prorata number of Performance Stock Units based on actual achievement of the performance measures set forth on the Grant Notice. For purposes of the preceding, the prorata number of the Performance Stock Units shall be equal to (i) the number of Performance Stock Units set forth in the Grant Notice, adjusted for actual achievement of performance measures, plus any Dividend Equivalents multiplied by (ii) a fraction, the numerator of which shall be the number of full calendar months the Participant is employed with the Company during the Measurement Period and the denominator of which shall be 36 calendar months. For purposes of the Agreement, the Measurement Period is (A) the same as the Performance Period for a Participant employed on the first day of the Performance Period, and (B) the 36 month period beginning on the Grant Date for all other Participants. The shares covered by the related portion of the award shall be delivered upon the applicable Vesting Date. ¹

(b)    Death and Disability. If the Participant’s Termination is due to death or Disability (for purposes of this Agreement, as defined in the applicable Anthem Long-Term Disability Plan), then the Performance Period shall immediately lapse, causing any restrictions which would otherwise remain on the Performance Stock Units to immediately lapse, and the Shares covered by the award shall be immediately delivered.

(c)    Without Cause. If the Participant’s Termination is by the Company or an Affiliate without Cause (for purposes of this Agreement, defined as a violation of “conduct” as such term is defined in the Anthem HR Corrective Action Policy and if the Participant participates in the Anthem, Inc. Executive Agreement Plan (the "Agreement Plan"), the Key Associate Agreement, or the Key Sales Associate Agreement also as defined in that plan or agreement), the Participant shall become vested in a prorata number of Performance Stock Units based on actual achievement of the performance measures set forth on the Grant Notice. For purposes of the preceding, the prorata number of the Performance Stock Units shall be equal to (i) the number of Performance Stock Units set forth in the Grant Notice, adjusted for actual achievement of performance measures, plus any Dividend Equivalents multiplied by (ii) a fraction, the numerator of which shall be the number of full calendar months elapsed from the first day of the Measurement Period through the Participant’s date of Termination and the denominator of which shall be 36 calendar months. The shares covered by the related portion of the award shall be delivered upon the applicable Vesting Date.

¹This retirement provision is deleted in non-annual retention grants.

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EXHIBIT 10.2(n)

(d)    Other Terminations. Unless Section 3(e) is applicable, if the Participant’s Termination is by the Company or an Affiliate or by the Participant for any reason other than death, Disability, Retirement or without Cause, then all Performance Stock Units for which the Performance Period had not lapsed prior to the date of such Termination shall be immediately forfeited.

(e)    Termination after Change of Control. If after a Change of Control the Participant’s Termination is (i) by the Company or an Affiliate without Cause or (ii), if the Participant participates in the Agreement Plan, by the Participant for Good Reason (as defined in the Agreement Plan), then there shall be paid out in cash to the Participant within 30 days following termination of employment the value of the Performance Stock Units to which the Participant would have been entitled if performance achieved 100% of the target performance measures as described in the attached Grant Notice. Notwithstanding any provision of this Agreement to the contrary, in the event that the Participant becomes entitled to vest in Performance Stock Units under any provision of this Section 3 by reason of any Termination and such Termination occurs within the two year period following a Change of Control that is a “change in control event” within the meaning of Code Section 409A, the Participant’s Performance Stock Units shall be paid to the Participant immediately upon such Termination.

4.    Transferability of the Performance Stock Units. The Participant shall have the right to appoint any individual or legal entity in writing, on a Designation of Beneficiary form, as his/her beneficiary to receive any Shares (to the extent not previously terminated or forfeited) under this Agreement upon the Participant’s death. Such designation under this Agreement may be revoked by the Participant at any time and a new beneficiary may be appointed by the Participant by execution and submission to the Company, or its designee, of a revised Designation of Beneficiary form to this Agreement. In order to be effective, a designation of beneficiary must be completed by the Participant on the Designation of Beneficiary form and received by the Company, or its designee, prior to the date of the Participant’s death. If the Participant dies without such designation, the Performance Stock Units will become part of the Participant’s estate.

5.    Dividend Equivalents. In the event the Company declares a dividend on Shares (as defined in the Plan), for each unvested Performance Stock Unit on the dividend payment date, the Participant shall be credited with a Dividend Equivalent, payable in cash, with a value equal to the value of the declared dividend. The Dividend Equivalents shall be subject to the same restrictions as the unvested Performance Stock Units to which they relate. No interest or other earnings shall be credited on the Dividend Equivalents, provided that additional Dividend Equivalents may be awarded or forfeited in the same proportion as the number of Performance Stock Units determined to be awarded or forfeited based on the achievement of the performance measures. Subject to continued employment with the Company and Affiliates and, as applicable, achievement of performance measures, the restrictions with respect to the Dividend Equivalents shall lapse at the same time and in the same proportion as the initial award of Performance Stock Units. No additional Dividend Equivalents shall be accrued for the benefit of the Participant with respect to record dates occurring prior to, or with respect to record dates occurring on or after the date, if any, on which the Participant has forfeited the Performance Stock Units or any Performance Stock Units have been settled. For any specified employee, any Dividend Equivalents subject to Code Section 409A and payable upon a termination of employment shall be subject to a six month delay. The Dividend Equivalents shall be subject to all such other provisions set forth herein, and may be used to satisfy any or all obligations for the payment of any tax attributable to the Dividend Equivalents and/or Performance Stock Units.

6.    Taxes and Withholdings. Upon the expiration of the applicable portion of the Performance Period (and delivery of the underlying Shares), or as of which the value of any Performance Stock Units first becomes includible in the Participant’s gross income for income tax purposes, the Participant shall satisfy all obligations for the payment of any tax attributable to the Performance Stock Units. The Participant shall notify the Company if the Participant wishes to pay the Company in cash, check or with shares of Anthem common stock already owned for the satisfaction of any taxes of any kind required by law to be withheld with respect to such Performance Stock Units. Any such election made by the Participant must be irrevocable, made in writing, signed by the Participant, and shall be subject to any restrictions or limitations that the Compensation Committee of the Board of Directors of the Company (“Committee”), in its sole discretion deems appropriate. If the Participant does not notify the Company in writing at least 14 days prior to the applicable lapse of the Performance Period, the Committee is authorized to take any such other action as may be necessary or appropriate, as determined by the Committee, to satisfy all obligations for the payment of such taxes. Such other actions may include withholding the required amounts from other compensation payable to the Participant, a sell-to-cover transaction or such other method determined by the Committee, in its discretion.

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EXHIBIT 10.2(n)

7.    Restrictive Covenants. For purposes of Sections 7, 8, 9, 10 and 11 of this Agreement, Company shall mean Anthem, Inc. and its subsidiaries and affiliates. The Participant acknowledges that s/he has the right to consult with counsel at the Participant’s sole expense. As a condition to receipt of the Performance Stock Unit Grant made under this Agreement and/or award of vested Performance Stock Units, which the Participant and the Company agree is fair and reasonable consideration, the Participant agrees as follows:

(a)    Confidentiality.

(i)The Participant recognizes that the Company derives substantial economic value from information created and used in its business which is not generally known by the public, including, but not limited to, plans, designs, concepts, computer programs, formulae, and equations; product fulfillment and supplier information; customer and supplier lists, and confidential business practices of the Company, its affiliates and any of its customers, vendors, business partners or suppliers; profit margins and the prices and discounts the Company obtains or has obtained or at which it sells or has sold or plans to sell its products or services (except for public pricing lists); manufacturing, assembling, labor and sales plans and costs; business and marketing plans, ideas, or strategies; confidential financial performance and projections; employee compensation; employee staffing and recruiting plans and employee personal information; and other confidential concepts and ideas related to the Company’s business (collectively, “Confidential Information”). The Participant expressly acknowledges and agrees that by virtue of his/her employment with the Company, the Participant will have access and will use in the course of the Participant’s duties certain Confidential Information and that Confidential Information constitutes trade secrets and confidential and proprietary business information of the Company, all of which is the exclusive property of the Company. For purposes of this Agreement, Confidential Information includes the foregoing and other information protected under the Indiana Uniform Trade Secrets Act (the “Act”), or to any comparable protection afforded by applicable law, but does not include information that the Participant establishes by clear and convincing evidence is or may become known to the Participant or to the public from sources outside the Company and through means other than a breach of this Agreement. Notwithstanding the foregoing, in accordance with the Defend Trade Secrets Act of 2016, the Participant will not be held criminally or civilly liable under any federal or state trade secret law for the disclosure of a trade secret that: (A) is made (1) in confidence to a federal, state, or local government official, either directly or indirectly, or to an attorney; and (2) solely for the purpose of reporting or investigating a suspected violation of law; or (B) is made in a complaint or other document that is filed under seal in a lawsuit or other proceeding. If the Participant files a lawsuit for retaliation by the Company for reporting a suspected violation of law, the Participant may disclose the Company’s trade secrets to his/her attorney and use the trade secret information in the court proceeding if the Participant (A) files any document containing the trade secret under seal; and (B) does not disclose the trade secret, except pursuant to court order.

(ii)    The Participant agrees that the Participant will not for himself or herself or for any other person or entity, directly or indirectly, without the prior written consent of the Company, while employed by the Company and thereafter: (A) use Confidential Information for the benefit of any person or entity other than the Company or its affiliates; (B) remove, copy, duplicate or otherwise reproduce any document or tangible item embodying or pertaining to any of the Confidential Information, except as required to perform the Participant’s duties for the Company or its affiliates; or (C) while employed and thereafter, publish, release, disclose or deliver or otherwise make available to any third party any Confidential Information by any communication, including oral, documentary, electronic or magnetic information transmittal device or media. Upon termination of employment, the Participant shall return all Confidential Information and all other property of the Company. This obligation of non-disclosure and non-use of information shall continue to exist for so long as such information remains Confidential Information. Provided, however, nothing in this Agreement prohibits or limits the Participant from (i) reporting possible violations of federal securities law or regulation to any governmental agency or entity or (ii) receiving a monetary award from the governmental agency or entity for the information reported.

(b)    Non-Competition. During any period in which the Participant is employed by the Company, and during a period of time after the Participant’s termination of employment (the “Restriction Period”)

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EXHIBIT 10.2(n)

which, unless otherwise limited by applicable state law, is (i) twenty-four (24) months for Executive Vice Presidents and the President & Chief Executive Officer, and (ii) the greater of the period of severance or twelve (12) months for all other Participants, the Participant will not, without prior written consent of the Company, directly or indirectly seek or obtain a Competitive Position in a Restricted Territory and perform a Restricted Activity with a Competitor, as those terms are defined herein.

(i)    Competitive Position means any employment or performance of services with a Competitor (A) the same as or similar to the services in which Participant performed for the Company in the last twenty-four (24) months of Participant’s employment with Company, or (B) in which the Participant will use any Confidential Information of the Company.

(ii)    Restricted Territory means any geographic area in which the Company does business and in which the Participant provided services in, had responsibility for, had a material presence or influence in, or had access to Confidential Information about, such business, within the thirty-six (36) months prior to the Participant’s termination of employment from the Company.

(iii)    Restricted Activity means any activity for which the Participant had responsibility for the Company within the thirty-six (36) months prior to the termination of the Participant’s employment from the Company or about which the Participant had Confidential Information.

(iv)    Competitor means any entity or individual (other than the Company or its affiliates) engaged in management of network-based managed care plans and programs, or the performance of managed care services, health insurance, long term care insurance, dental, life or disability insurance, behavioral health, vision, flexible spending accounts and COBRA administration or other products or services substantially the same or similar to those offered by the Company while the Participant was employed, or other products or services offered by the Company within twelve (12) months after the termination of Participant’s employment if the Participant had responsibility for, or Confidential Information about, such other products or services while the Participant was employed by the Company.

(v)    The restrictions contained in this subsection (b) shall not apply to attorneys who accept a Competitive Position that consists of practicing law.

(c)    Non-Solicitation of Customers. During any period in which the Participant is employed by the Company, and during the Restriction Period after the Participant’s termination of employment, the Participant will not, either individually or as an employee, partner, consultant, independent contractor, owner, agent, or in any other capacity, directly or indirectly, for a Competitor of the Company as defined in subsection (b) above: (i) solicit business from any client or account of the Company or any of its affiliates with which the Participant had contact, participated in the contact, or responsibility for, or about which the Participant had knowledge of Confidential Information by reason of the Participant’s employment with the Company, (ii) solicit business from any client or account which was pursued by the Company or any of its affiliates and with which the Participant had contact, or responsibility for, or about which the Participant had knowledge of Confidential Information by reason of the Participant’s employment with the Company, within the twelve (12) month period prior to termination of employment. For purposes of this provision, an individual policyholder in a plan maintained by the Company or by a client or account of the Company under which individual policies are issued, or a certificate holder in such plan under which group policies are issued, shall not be considered a client or account subject to this restriction solely by reason of being such a policyholder or certificate holder.

(d)    Non-Solicitation of Employees. During any period in which the Participant is employed by the Company, and during the Restriction Period after the Participant’s termination of employment, the Participant will not, either individually or as an employee, partner, independent contractor, owner, agent, or in any other capacity, directly or indirectly solicit, hire, attempt to solicit or hire, or participate in any attempt to solicit or hire, for any non-Company affiliated entity, any person who on or during the six (6) months immediately preceding the date of such solicitation or hire is or was an officer or employee of the Company, or whom the Participant was involved in recruiting while the Participant was employed by the Company.

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EXHIBIT 10.2(n)

(e)    Non-Disparagement. The Participant agrees that he/she will not, nor will he/she cause or assist any other person to, make any statement to a third party or take any action which is intended to or would reasonably have the effect of disparaging or harming the Company or the business reputation of the Company’s directors, employees, officers and managers. Further, the Participant will not at any time make any verbal or written statement to any media outlet regarding the Company.

8.    Return of Consideration.

(a)    If at any time a Participant breaches any provision of Section 7 or Section 11 then: (i) all unexercised Company stock options under any Designated Plan (defined below) whether or not otherwise vested shall cease to be exercisable and shall immediately terminate; (ii) the Participant shall forfeit any outstanding restricted stock or other outstanding equity award made under any Designated Plan and not otherwise vested on the date of breach; and (iii) the Participant shall pay to the Company (A) for each share of common stock of the Company (“Common Share”) acquired on exercise of an option under a Designated Plan within the 24 months prior to such breach, the excess of the fair market value of a Common Share on the date of exercise over the exercise price, and (B) for each share of restricted stock and/or performance stock that became vested under any Designated Plan within the 24 months prior to such breach, the fair market value (on the date of vesting) of a Common Share. Any amount to be repaid pursuant to this Section 8 shall be held by the Participant in constructive trust for the benefit of the Company and shall, upon written notice from the Company, within 10 days of such notice, be paid by the Participant to the Company with interest from the date such Common Share was acquired or the share of restricted stock became vested, as the case may be, to the date of payment, at 120% of the applicable six month short-term applicable federal rate. Any amount described in clauses (i) and (ii) that the Participant forfeits as a result of a breach of the provisions of Sections 7 or 11 shall not reduce any money damages that would be payable to the Company as compensation for such breach.

(b)    The amount to be repaid pursuant to this Section 8 shall be determined on a gross basis, without reduction for any taxes incurred, as of the date of the realization event, and without regard to any subsequent change in the fair market value of a Common Share. The Company shall have the right to offset such amount against any amounts otherwise owed to the Participant by the Company (whether as wages, vacation pay, or pursuant to any benefit plan or other compensatory arrangement other than any amount pursuant to any nonqualified deferred compensation plan under Section 409A of the Code).

(c)    For purposes of this Section 8, a “Designated Plan” is each stock option, restricted stock, or other equity compensation or long-term incentive compensation plan.

9.    Equitable Relief and Other Remedies. As a condition to this Agreement:

(a)    The Participant acknowledges that each of the provisions of Section 7 and 8 of the Plan are reasonable and necessary to preserve the legitimate business interests of the Company, its present and potential business activities and the economic benefits derived therefrom; that they will not prevent him or her from earning a livelihood in the Participant’s chosen business and are not an undue restraint on the trade of the Participant, or any of the public interests which may be involved.

(b)    The Participant agrees that beyond the amounts otherwise to be provided under the Plan and this Agreement, the Company will be damaged by a violation of the terms of this Agreement and the amount of such damage may be difficult to measure. The Participant agrees that if the Participant commits or threatens to commit a breach of any of the covenants and agreements contained in Sections 7 or 11 to the extent permitted by applicable law, then the Company shall have the right to seek and obtain all appropriate injunctive and other equitable remedies, without posting bond therefor, except as required by law, in addition to any other rights and remedies that may be available at law or under this Agreement, it being acknowledged and agreed that any such breach would cause irreparable injury to the Company and that money damages would not provide an adequate remedy. Further, if the Participant violates Section 7 hereof the Participant agrees that the period of violation shall be added to the period in which the Participant’s activities are restricted.

(c)    Notwithstanding the foregoing, the Company will not seek injunctive relief to prevent a Participant residing in California from engaging in post termination competition in California under Section 7(b) or (c) of this Agreement, provided that the Company may seek and obtain relief to enforce Section 8 of this Agreement with respect to such Participants.

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EXHIBIT 10.2(n)

(d)    The parties agree that the covenants contained herein are severable. If an arbitrator or court shall hold that the duration, scope, area or activity restrictions stated herein are unreasonable under circumstances then existing, or under applicable state law, the parties agree that the maximum duration, scope, area or activity restrictions reasonable and enforceable under such circumstances shall be substituted for the stated duration, scope, area or activity restrictions to the maximum extent permitted by law. The parties further agree that the Company’s rights under Section 8 should be enforced to the fullest extent permitted by law irrespective of whether the Company seeks equitable relief in addition to relief provided therein or if the arbitrator or court deems equitable relief to be inappropriate.

10.    Survival of Provisions. The obligations contained in Sections 7, 8, 9 and Section 11 shall survive the Termination of the Participant’s employment with the Company and shall be fully enforceable thereafter.

11.    Cooperation. Upon the receipt of reasonable notice from the Company (including from outside counsel to the Company), the Participant agrees that while employed by the Company and for two years (or, if longer, for so long as any claim referred to in this Section remains pending) after the termination of Participant’s employment for any reason, the Participant will respond and provide information with regard to matters in which the Participant has knowledge as a result of the Participant’s employment with the Company, and will provide reasonable assistance to the Company, its affiliates and their respective representatives in defense of any claims that may be made against the Company or its affiliates, and will assist the Company and its affiliates in the prosecution of any claims that may be made by the Company or its affiliates, to the extent that such claims may relate to the period of the Participant’s employment with the Company (or any predecessor); provided, that with respect to periods after the termination of the Participant’s employment, the Company shall reimburse the Participant for any out-of-pocket expenses incurred in providing such assistance and if the Participant is required to provide more than ten (10) hours of assistance per week after his termination of employment then the Company shall pay the Participant a reasonable amount of money for his services at a rate agreed to between the Company and the Participant; and provided further that after the Participant’s termination of employment with the Company such assistance shall not unreasonably interfere with the Participant’s business or personal obligations. The Participant agrees to promptly inform the Company if the Participant becomes aware of any lawsuits involving such claims that may be filed or threatened against the Company or its affiliates. The Participant also agrees to promptly inform the Company (to the extent the Participant is legally permitted to do so) if the Participant is asked to assist in any investigation of the Company or its affiliates (or their actions), regardless of whether a lawsuit or other proceeding has then been filed against the Company or its affiliates with respect to such investigation, and shall not do so unless legally required. Provided, however, the Participant is not required to inform the Company of any investigation by a governmental agency or entity resulting from the reporting of possible violations of federal securities law or regulation to any governmental agency or entity, and the Participant may participate in such investigation, without informing the Company.

12.    No Rights as a Shareholder. The Participant shall have no rights of a shareholder (including, without limitation, dividend and voting rights) with respect to the Performance Stock Units, for record dates occurring on or after the Grant Date and prior to the date any such Performance Stock Units vest in accordance with this Agreement.

13.    No Right to Continued Employment. Neither the Performance Stock Units nor any terms contained in this Agreement shall confer upon the Participant any express or implied right to be retained in the employment or service of the Company or any Affiliate for any period, nor restrict in any way the right of the Company, which right is hereby expressly reserved, to terminate the Participant’s employment or service at any time for any reason. The Participant acknowledges and agrees that any right to have restrictions on the Performance Stock Units lapse is earned only by continuing as an employee of the Company or an Affiliate at the will of the Company or such Affiliate, or satisfaction of any other applicable terms and conditions contained in the Plan and this Agreement, and not through the act of being hired, being granted the Performance Stock Units or acquiring Shares hereunder.

14.    The Plan. This Agreement is subject to all the terms, provisions and conditions of the Plan, which are incorporated herein by reference, and to such regulations as may from time to time be adopted by the Committee. Unless defined herein, capitalized terms are as defined in the Plan. In the event of any conflict between the provisions of the Plan and this Agreement, the provisions of the Plan shall control, and this Agreement shall be deemed to be modified accordingly. The Plan and the prospectus describing the Plan can be found on the Company’s HR intranet. A paper copy of the Plan and the prospectus shall be provided to the Participant upon the Participant’s written request to the Company at Anthem, Inc., 220 Virginia Avenue, Indianapolis, Indiana 46204, Attention: Corporate Secretary, Shareholder Services Department.

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EXHIBIT 10.2(n)

15.    Compliance with Laws and Regulations.

(a)    The Performance Stock Units and the obligation of the Company to deliver Shares hereunder shall be subject in all respects to (i) all applicable Federal and state laws, rules and regulations and (ii) any registration, qualification, approvals or other requirements imposed by any government or regulatory agency or body which the Committee shall, in its discretion, determine to be necessary or applicable. Moreover, the Company shall not deliver any certificates for Shares to the Participant or any other person pursuant to this Agreement if doing so would be contrary to applicable law. If at any time the Company determines, in its discretion, that the listing, registration or qualification of Shares upon any national securities exchange or under any state or Federal law, or the consent or approval of any governmental regulatory body, is necessary or desirable, the Company shall not be required to deliver any certificates for Shares to the Participant or any other person pursuant to this Agreement unless and until such listing, registration, qualification, consent or approval has been effected or obtained, or otherwise provided for, free of any conditions not acceptable to the Company.

(b)    The Shares received upon the expiration of the applicable portion of the Performance Period shall have been registered under the Securities Act of 1933 (“Securities Act”). If the Participant is an “affiliate” of the Company, as that term is defined in Rule 144 under the Securities Act (“Rule 144”), the Participant may not sell the Shares received except in compliance with Rule 144. Certificates representing Shares issued to an “affiliate” of the Company may bear a legend setting forth such restrictions on the disposition or transfer of the Shares as the Company deems appropriate to comply with Federal and state securities laws.

(c)    If, at any time, the Shares are not registered under the Securities Act, and/or there is no current prospectus in effect under the Securities Act with respect to the Shares, the Participant shall execute, prior to the delivery of any Shares to the Participant by the Company pursuant to this Agreement, an agreement (in such form as the Company may specify) in which the Participant represents and warrants that the Participant is purchasing or acquiring the shares acquired under this Agreement for the Participant’s own account, for investment only and not with a view to the resale or distribution thereof, and represents and agrees that any subsequent offer for sale or distribution of any kind of such Shares shall be made only pursuant to either (i) a registration statement on an appropriate form under the Securities Act, which registration statement has become effective and is current with regard to the Shares being offered or sold, or (ii) a specific exemption from the registration requirements of the Securities Act, but in claiming such exemption the Participant shall, prior to any offer for sale of such Shares, obtain a prior favorable written opinion, in form and substance satisfactory to the Company, from counsel for or approved by the Company, as to the applicability of such exemption thereto.

16.    Code Section 409A Compliance. Except with respect to Participants who are Retirement eligible or become Retirement eligible before the calendar year containing the Vesting Date as shown on the Grant Notice, it is intended that this Agreement meet the short-term deferral exception from Code Section 409A. This Agreement and the Plan shall be administered in a manner consistent with this intent and any provision that would cause the Agreement or Plan to fail to satisfy this exception shall have no force and effect. Notwithstanding anything contained herein to the contrary, Shares in respect of any Performance Stock Units that (a) constitute “nonqualified deferred compensation” as defined in Code Section 409A and (b) vest as a consequence of the Participant’s Termination shall not be delivered until the date that the Participant incurs a “separation from service” within the meaning of Code Section 409A (or, if the Participant is a “specified employee” within the meaning of Code Section 409A and the regulations promulgated thereunder, the date that is six months following the date of such “separation from service” (or death, if earlier). In addition, each amount to be paid or benefit to be provided to the Participant pursuant to this Agreement that constitutes deferred compensation subject to Code Section 409A, shall be construed as a separate identified payment for purposes of Code Section 409A.

17.    Notices. All notices by the Participant or the Participant’s assignees shall be addressed to Anthem, Inc., 220 Virginia Avenue, Indianapolis, Indiana 46204, Attention: Stock Administration, or such other address as the Company may from time to time specify. All notices to the Participant shall be addressed to the Participant at the Participant’s address in the Company’s records.

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2019 Performance Stock Unit

EXHIBIT 10.2(n)

18.    Other Plans. The Participant acknowledges that any income derived from the Performance Stock Units shall not affect the Participant’s participation in, or benefits under, any other benefit plan or other contract or arrangement maintained by the Company or any Affiliate.

19.    Recoupment Policy for Incentive Compensation. The Company's Recoupment Policy for Incentive Compensation, as may be amended from time to time, shall apply to the Performance Stock Units, any Shares delivered hereunder and any profits realized on the sale of such Shares to the extent that the Participant is covered by such policy. If the Participant is covered by such policy, the policy may apply to recoup Performance Stock Units awarded, any Shares delivered hereunder or profits realized on the sale of such Shares either before, on or after the date on which the Participant becomes subject to such policy.

ANTHEM, INC.

By:     
Printed: Lewis Hay III
Its: Chair, Compensation Committee
of the Board of Directors

10

2019 Performance Stock Unit

EX-31.1

Exhibit 31.1

CERTIFICATION PURSUANT TO

RULE 13a-14(a) AND RULE 15d-14(a) OF THE EXCHANGE ACT RULES,

AS ADOPTED PURSUANT TO

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Gail K. Boudreaux, certify that:

1. I have reviewed this report on Form 10-Q of Anthem, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent function):

a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

April 24, 2019	/s/ GAIL K. BOUDREAUX
	President and Chief Executive Officer

EX-31.2

Exhibit 31.2

CERTIFICATION PURSUANT TO

RULE 13a-14(a) AND RULE 15d-14(a) OF THE EXCHANGE ACT RULES,

AS ADOPTED PURSUANT TO

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, John E. Gallina, certify that:

1. I have reviewed this report on Form 10-Q of Anthem, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent function):

a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

April 24, 2019	/s/ JOHN E. GALLINA
	Executive Vice President and      Chief Financial Officer

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Anthem, Inc. (the “Company”) on Form 10-Q for the period ended March 31, 2019 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Gail K. Boudreaux, President and Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ GAIL K. BOUDREAUX

Gail K. Boudreaux

President and Chief Executive Officer

April 24, 2019

EX-32.2

Exhibit 32.2

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Anthem, Inc. (the “Company”) on Form 10-Q for the period ended March 31, 2019 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, John E. Gallina, Executive Vice President and Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ JOHN E. GALLINA

John E. Gallina

Executive Vice President and Chief Financial Officer

April 24, 2019

XML

Document And Entity Information - shares	3 Months Ended
	Mar. 31, 2019	Apr. 15, 2019
Document and Entity Information
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Mar. 31, 2019
Document Fiscal Year Focus	2019
Document Fiscal Period Focus	Q1
Trading Symbol	ANTM
Entity Registrant Name	Anthem, Inc.
Entity Central Index Key	0001156039
Current Fiscal Year End Date	--12-31
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		257,195,705

XML

Consolidated Balance Sheets - USD ($) $ in Millions	Mar. 31, 2019	Dec. 31, 2018
Current assets:
Cash and cash equivalents	$ 4,482	$ 3,934
Fixed maturity securities, current (amortized cost of $17,550 and $16,894)	17,795	16,692
Equity securities, current	1,211	1,493
Other invested assets, current	20	21
Accrued investment income	161	162
Premium receivables	5,049	4,465
Self-funded receivables	2,491	2,278
Other receivables	2,639	2,558
Income taxes receivable	0	10
Securities lending collateral	591	604
Other current assets	2,172	2,104
Total current assets	36,611	34,321
Long-term investments:
Fixed maturity securities (amortized cost of $482 and $486)	492	487
Equity securities	33	33
Other invested assets	3,710	3,726
Property and equipment, net	2,799	2,735
Goodwill	20,500	20,504
Other intangible assets	8,925	9,007
Other noncurrent assets	1,453	758
Total assets	74,523	71,571
Policy Liabilities
Medical claims payable	8,242	7,454
Reserves for future policy benefits	78	75
Other policyholder liabilities	2,577	2,590
Total policy liabilities	10,897	10,119
Unearned income	998	902
Accounts payable and accrued expenses	3,951	4,959
Income taxes payable	105	0
Security trades pending payable	158	197
Securities lending payable	590	604
Short-term borrowings	1,095	1,145
Current portion of long-term debt	851	849
Other current liabilities	4,037	3,190
Total current liabilities	22,682	21,965
Long-term debt, less current portion	17,396	17,217
Reserves for future policy benefits, noncurrent	719	706
Deferred tax liabilities, net	2,116	1,960
Other noncurrent liabilities	1,612	1,182
Total liabilities	44,525	43,030
Commitment and contingencies – Note 11
Shareholders' equity
Preferred stock, without par value, shares authorized – 100,000,000; shares issued and outstanding – none	0	0
Common stock, par value $0.01, shares authorized – 900,000,000; shares issued and outstanding – 257,354,383 and 257,395,577	3	3
Additional paid-in capital	9,482	9,536
Retained earnings	21,136	19,988
Accumulated other comprehensive loss	(623)	(986)
Total shareholders' equity	29,998	28,541
Total liabilities and shareholders' equity	$ 74,523	$ 71,571

XML

Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Millions	Mar. 31, 2019	Dec. 31, 2018
Statement of Financial Position [Abstract]
Available-for-sale fixed maturity securities investments, current, amortized cost	$ 17,550	$ 16,894
Available-for-sale fixed maturity securities investments, long-term, amortized cost	$ 482	$ 486
Preferred stock, par value	$ 0	$ 0
Preferred stock, shares authorized	100,000,000	100,000,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Common stock, par value	$ 0.01	$ 0.01
Common stock, shares authorized	900,000,000	900,000,000
Common stock, shares issued	257,354,383	257,395,577
Common stock, shares outstanding	257,354,383	257,395,577

XML

Consolidated Statements Of Income - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Revenues
Premiums	$ 22,843	$ 20,903
Administrative fees and other revenue	1,545	1,439
Total operating revenue	24,388	22,342
Net investment income	210	229
Net realized gains (losses) on financial instruments	78	(26)
Other-than-temporary impairment losses on investments:
Total other-than-temporary impairment losses on investments	(13)	(8)
Portion of other-than-temporary impairment losses recognized in other comprehensive income	3	0
Other-than-temporary impairment losses recognized in income	(10)	(8)
Total revenues	24,666	22,537
Expenses
Benefit expense	19,282	17,046
Selling, general and administrative expense	3,166	3,428
Interest expense	187	184
Amortization of other intangible assets	87	80
(Gain) loss on extinguishment of debt	(1)	19
Total expenses	22,721	20,757
Income before income tax expense	1,945	1,780
Income tax expense	394	468
Net income	$ 1,551	$ 1,312
Net income per share
Basic net income per share	$ 6.03	$ 5.13
Diluted net income per share	5.91	4.99
Dividends per share	$ 0.80	$ 0.75

XML

Consolidated Statements of Comprehensive Income - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Statement of Comprehensive Income [Abstract]
Net income	$ 1,551	$ 1,312
Other comprehensive income (loss), net of tax:
Change in net unrealized gains/losses on investments	357	(245)
Change in net unrealized losses on cash flow hedges	3	29
Change in net periodic pension and postretirement costs	3	7
Other comprehensive income (loss)	363	(209)
Total comprehensive income	$ 1,914	$ 1,103

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Consolidated Statements Of Cash Flows - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Operating activities
Net income	$ 1,551	$ 1,312
Adjustments to reconcile net income to net cash provided by operating activities:
Net realized (gains) losses on financial instruments	(78)	26
Other-than-temporary impairment losses recognized in income	10	8
(Gain) loss on extinguishment of debt	(1)	19
Deferred income taxes	55	(51)
Amortization, net of accretion	255	240
Depreciation expense	34	30
Share-based compensation	70	42
Changes in operating assets and liabilities:
Receivables, net	(753)	37
Other invested assets	(21)	(7)
Other assets	(125)	(392)
Policy liabilities	791	(561)
Unearned income	96	1,182
Accounts payable and accrued expenses	(1,029)	(300)
Other liabilities	675	147
Income taxes	115	537
Other, net	(15)	(54)
Net cash provided by operating activities	1,630	2,215
Investing activities
Purchases of fixed maturity securities	(2,300)	(2,236)
Proceeds from fixed maturity securities:
Sales	1,075	1,864
Maturities, calls and redemptions	393	363
Purchases of equity securities	(3,691)	(566)
Proceeds from sales of equity securities	4,048	1,776
Purchases of other invested assets	(78)	(72)
Proceeds from sales of other invested assets	113	23
Changes in securities lending collateral	14	(158)
Purchases of subsidiaries, net of cash acquired	0	(1,346)
Purchases of property and equipment	(234)	(218)
Other, net	8	4
Net cash used in investing activities	(652)	(566)
Financing activities
Net proceeds from (repayments of) commercial paper borrowings	178	(108)
Proceeds from long-term borrowings	2	836
Repayments of long-term borrowings	(63)	(663)
Proceeds from short-term borrowings	2,710	1,505
Repayments of short-term borrowings	(2,760)	(1,655)
Changes in securities lending payable	(14)	158
Changes in bank overdrafts	20	(124)
Repurchase and retirement of common stock	(294)	(395)
Change in collateral and settlements of debt-related derivatives	0	24
Cash dividends	(206)	(192)
Proceeds from issuance of common stock under employee stock plans	76	60
Taxes paid through withholding of common stock under employee stock plans	(78)	(73)
Net cash used in financing activities	(429)	(627)
Effect of foreign exchange rates on cash and cash equivalents	(1)	0
Change in cash and cash equivalents	548	1,022
Cash and cash equivalents at beginning of period	3,934	3,609
Cash and cash equivalents at end of period	$ 4,482	$ 4,631

XML

Consolidated Statements Of Shareholders' Equity - USD ($) shares in Millions, $ in Millions	Total	Common Stock [Member]	Additional Paid-In Capital [Member]	Retained Earnings [Member]	Accumulated Other Comprehensive (Loss) Income [Member]
Cumulative effect of new accounting principle in period of adoption				$ 320	$ (320)
Adjusted beginning balance				18,374	(421)
Balance at Dec. 31, 2017	$ 26,503	$ 3	$ 8,547	18,054	(101)
Balance (in shares) at Dec. 31, 2017		256.1
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income	1,312			1,312
Other comprehensive income (loss)	(209)				(209)
Repurchase and retirement of common stock, value	$ (394)	$ 0	(56)	(338)
Repurchase and retirement of common stock, shares	(1.7)	(1.7)
Dividends and dividend equivalents	$ (198)			(198)
Issuance of common stock under employee stock plans, net of related tax benefits	28		28
Issuance of common stock under employee stock plans, net of related tax benefits, Shares		1.1
Convertible debenture repurchases and conversions	(30)		(30)
Adoption of ASU 2018-02 (Note 2)				91	(91)
Balance at Mar. 31, 2018	27,012	$ 3	8,489	19,241	(721)
Balance (in shares) at Mar. 31, 2018		255.5
Cumulative effect of new accounting principle in period of adoption	26			26
Adjusted beginning balance	28,567		9,536	20,014	(986)
Balance at Dec. 31, 2018	28,541	$ 3	9,536	19,988	(986)
Balance (in shares) at Dec. 31, 2018		257.4
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income	1,551			1,551
Other comprehensive income (loss)	363				363
Repurchase and retirement of common stock, value	$ (294)	$ 0	(71)	(223)
Repurchase and retirement of common stock, shares	(1.1)	(1.1)
Dividends and dividend equivalents	$ (206)			(206)
Issuance of common stock under employee stock plans, net of related tax benefits	69		69
Issuance of common stock under employee stock plans, net of related tax benefits, Shares		1.1
Convertible debenture repurchases and conversions	(52)		(52)
Balance at Mar. 31, 2019	$ 29,998	$ 3	$ 9,482	$ 21,136	$ (623)
Balance (in shares) at Mar. 31, 2019		257.4

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Organization

3 Months Ended

Mar. 31, 2019

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Organization

Organization

References to the terms “we,” “our,” “us” or “Anthem” used throughout these Notes to Consolidated Financial Statements refer to Anthem, Inc., an Indiana corporation, and unless the context otherwise requires, its direct and indirect subsidiaries. References to the “states” include the District of Columbia, unless the context otherwise requires.

We are one of the largest health benefits companies in the United States in terms of medical membership, serving approximately 41medical members through our affiliated health plans as of March 31, 2019. We offer a broad spectrum of network-based managed care plans to Large Group, Small Group, Individual, Medicaid and Medicare markets. Our managed care plans include: Preferred Provider Organizations, or PPOs; Health Maintenance Organizations, or HMOs; Point-of-Service, or POS, plans; traditional indemnity plans and other hybrid plans, including Consumer-Driven Health Plans, or CDHPs; and hospital only and limited benefit products. In addition, we provide a broad array of managed care services to self-funded customers, including claims processing, stop loss insurance, actuarial services, provider network access, medical cost management, disease management, wellness programs and other administrative services. We 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. We also provide services to the federal government in connection with the Federal Employee Program^®.

We are an independent licensee of the Blue Cross and Blue Shield Association, or BCBSA, an association of independent health benefit plans. We serve our members as the Blue Cross licensee for California and as the Blue Cross and Blue Shield, or BCBS, licensee for Colorado, Connecticut, Georgia, Indiana, Kentucky, Maine, Missouri (excluding 30counties in the Kansas City area), Nevada, New Hampshire, New York (in the New York City metropolitan area and upstate New York), Ohio, Virginia (excluding the Northern Virginia suburbs of Washington, D.C.) and Wisconsin. In a majority of these service areas, we do business as Anthem Blue Cross, Anthem Blue Cross and Blue Shield, and Empire Blue Cross Blue Shield or Empire Blue Cross. We also conduct business through arrangements with other BCBS licensees. Through our subsidiaries, we also serve customers in numerous states across the country as America’s 1st Choice, Amerigroup, Aspire Health, CareMore, Freedom Health, HealthLink, HealthSun, Optimum HealthCare, Simply Healthcare, and/or Unicare. We are licensed to conduct insurance operations in all 50 states and the District of Columbia through our subsidiaries.

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Basis Of Presentation and Significant Accounting Policies

3 Months Ended

Mar. 31, 2019

Accounting Policies [Abstract]

Basis of Presentation and Significant Accounting Policies

Basis of Presentation and Significant Accounting Policies

Basis of Presentation: The accompanying unaudited consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles, or GAAP, for interim financial reporting. Accordingly, they do not include all of the information and footnotes required by GAAP for annual financial statements. We have omitted certain footnote disclosures that would substantially duplicate the disclosures in our 2018 Annual Report on Form 10-K, unless the information contained in those disclosures materially changed or is required by GAAP. Certain prior year amounts have been reclassified to conform to the current year presentation or adjusted to conform to the current year rounding convention of reporting financial data in whole millions of dollars, except as otherwise noted. In the opinion of management, all adjustments, including normal recurring adjustments, necessary for a fair statement of the consolidated financial statements as of and for the three months ended March 31, 2019 and 2018 have been recorded. The results of operations for the three months ended March 31, 2019 are not necessarily indicative of the results that may be expected for the full year ending December 31, 2019, or any other period. These unaudited consolidated financial statements should be read in conjunction with our audited consolidated financial statements as of and for the year ended December 31, 2018 included in our 2018 Annual Report on Form 10-K.

Certain of our subsidiaries operate outside of the United States and have functional currencies other than the U.S. dollar, or USD. We translate the assets and liabilities of those subsidiaries to USD using the exchange rate in effect at the end of the period. We translate the revenues and expenses of those subsidiaries to USD using the average exchange rates in effect during the period. The net effect of these translation adjustments is included in “Foreign currency translation adjustments” in our consolidated statements of comprehensive income.

Cash and Cash Equivalents: We control a number of bank accounts that are used exclusively to hold customer funds for the administration of customer benefits and have cash and cash equivalents on deposit to meet certain regulatory requirements. These amounts totaled $262 and $222 at March 31, 2019 and December 31, 2018, respectively and are included in the cash and cash equivalents line on our consolidated balance sheets.

Leases:We lease office space and certain computer and related equipment under noncancelable operating leases. We determine whether an arrangement is or contains a lease at its inception. We recognize lease liabilities based on the present value of the minimum lease payments not yet paid by using the lease term and discount rate determined at lease commencement. As our leases do not provide an implicit rate, we use our incremental secured borrowing rate commensurate with the underlying lease terms to determine the present value of our lease payments. Our leases may include options to extend or terminate a lease when it is reasonably certain that we will exercise that option. We recognize the operating right-of-use, or ROU, assets at an amount equal to the lease liability adjusted for prepaid or accrued rent, remaining balance of any lease incentives and unamortized initial direct costs.

The operating lease liabilities are reported in other current liabilities and other noncurrent liabilities and the related ROU assets are reported in other noncurrent assets on our consolidated balance sheet. Lease expense for our operating leases is calculated on a straight-line basis over the lease term and is reported in selling, general and administrative expense on our consolidated statements of income. For our office space leases, we account for the lease and non-lease components (such as common area maintenance) as a single lease component. We also do not recognize a lease liability or ROU asset for our office space leases whose lease terms, at commencement, are twelve months or less and that do not include a purchase option or option to extend that we are reasonably certain to exercise.

Revenue Recognition: Premiums for fully-insured contracts are recognized as revenue over the period insurance coverage is provided, and, if applicable, net of amounts recognized for the minimum medical loss ratio rebates or contractual or government-mandated premium stabilization programs. Administrative fees and other revenues include revenue from certain group contracts that provide for the group to be at risk for all, or with supplemental insurance arrangements, a portion of their claims experience. We charge these self-funded groups an administrative fee, which is based on the number of members in a group or the group’s claim experience. Under our self-funded arrangements, revenue is recognized as administrative services are performed, and benefit payments under these programs are excluded from benefit expense. For additional information about our revenues, see Note 2, “Basis of Presentation and Significant Accounting Policies” and Note 19, “Segment Information,” to our audited consolidated financial statements as of and for the year ended December 31, 2018 included in our 2018 Annual Report on Form 10-K. In addition, see Note 15, “Segment Information,” herein for the disaggregation of revenues by segments and products.

For our non-fully-insured contracts, we had no material contract assets, contract liabilities or deferred contract costs recorded on our consolidated balance sheet at March 31, 2019. For the three months ended March 31, 2019, revenue recognized from performance obligations related to prior periods, such as due to changes in transaction price, was not material. For contracts that have an original expected duration of greater than one year, revenue expected to be recognized in future periods related to unfulfilled contractual performance obligations and contracts with variable consideration related to undelivered performance obligations is not material.

Recently Adopted Accounting Guidance: In March 2019, the Financial Accounting Standards Board, or FASB, issued Accounting Standards Update No. 2019-01, Leases (Topic 842): Codification Improvements. In July 2018, the FASB issued Accounting Standards Update No. 2018-11, Leases (Topic 842): Targeted Improvements and Accounting Standards Update No. 2018-10, Codification Improvements to Topic 842, Leases. These updates provide additional clarification, an optional transition method, a practical expedient and implementation guidance on the previously issued Accounting Standards Update No. 2016-02, Leases (Topic 842). Collectively, these updates supersede the lease guidance in Accounting Standards Codification, or ASC, Topic 840 and require lessees to recognize for all leases, with the exception of short-term leases, a lease liability, which is a lessee’s obligation to make lease payments arising from a lease, measured on a discounted basis. Concurrently, lessees are required to recognize an ROU asset, which is an asset that represents the lessee’s right to use, or control the use of, a specified asset for the lease term. We adopted this standard on January 1, 2019 by applying the optional transition method on the adoption date and did not adjust comparative periods. We also elected the package of practical expedients permitted, which among other things, allowed us to carry forward the lease classification for our existing leases. In preparation for the adoption of this standard and to enable preparation of the required financial information, we implemented a new lease accounting software solution as well as new internal controls. The adoption of this standard impacted our 2019 opening consolidated balance sheet as we recorded operating lease liabilities of $728 and ROU assets of $637, which equals the lease liabilities net of accrued rent, lease incentives and the carrying amount of ceased-use liabilities previously recorded on our balance sheet under the old guidance. We also recognized a cumulative-effect adjustment of $26 to our opening retained earnings for deferred gains on our previous sale-leaseback transactions. The adoption of this standard did not have an impact on our consolidated statements of income or cash flows.

In August 2018, the FASB issued Accounting Standards Update No. 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement, or ASU 2018-13. The amendments in ASU 2018-13 eliminate, add, and modify certain disclosure requirements for fair value measurements. The amendments are effective for interim and annual periods beginning after December 15, 2019, with early adoption permitted for either the entire ASU or only the provisions that eliminate or modify requirements. We early adopted the provisions that eliminate and modify disclosure requirements, on a retrospective basis, effective in our 2018 Annual Report on Form 10-K. We will adopt the new disclosure requirements, on a prospective basis, effective for our interim and annual reporting periods beginning after December 15, 2019.

In February 2018, the FASB issued Accounting Standards Update No. 2018-02, Income Statement—Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income, or ASU 2018-02. On December 22, 2017, the federal government enacted a tax bill, H.R.1, An act to provide for reconciliation pursuant to titles II and V of the concurrent resolution on the budget for fiscal year 2018, or the Tax Cuts and Jobs Act. The Tax Cuts and Jobs Act contains significant changes to corporate taxation, including, but not limited to, reducing the U.S. federal corporate income tax rate from 35% to 21% and modifying or limiting many business deductions. Current FASB guidance requires adjustments of deferred taxes due to a change in the federal corporate income tax rate to be included in income from operations. As a result, the tax effects of items within accumulated other comprehensive loss did not reflect the appropriate tax rate. The amendments in ASU 2018-02 allow a reclassification from accumulated other comprehensive loss to retained earnings for stranded tax effects resulting from the change in the federal corporate income tax rate. We adopted the amendments in ASU 2018-02 for our interim and annual reporting periods beginning on January 1, 2018 and reclassified $91 of stranded tax effects from accumulated other comprehensive loss to retained earnings on our consolidated balance sheet. The adoption of ASU 2018-02 did not have any impact on our results of operations or cash flows.

In May 2017, the FASB issued Accounting Standards Update No. 2017-09, Compensation - Stock Compensation (Topic 718): Scope of Modification Accounting, or ASU 2017-09. This update provides guidance about which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting in Topic 718. We adopted ASU 2017-09 on January 1, 2018. The guidance has been and will be applied prospectively to awards modified on or after the adoption date. The adoption of ASU 2017-09 did not have any impact on our consolidated financial position, results of operations or cash flows.

In March 2017, the FASB issued Accounting Standards Update No. 2017-08, Receivables - Nonrefundable Fees and Other Costs (Subtopic 310-20): Premium Amortization on Purchased Callable Debt Securities, or ASU 2017-08. This update changes the amortization period for certain purchased callable debt securities held at a premium by shortening the amortization period for the premium to the earliest call date. Under current guidance, the premium is generally amortized over the contractual life of the instrument. The amendments are to be applied on a modified retrospective basis through a cumulative-effect adjustment directly to retained earnings as of the beginning of the period of adoption. We adopted ASU 2017-08 on January 1, 2019, and the adoption of this standard did not have a material impact on our beginning retained earnings or on our consolidated financial position, results of operations or cash flows.

In March 2017, the FASB issued Accounting Standards Update No. 2017-07, Compensation - Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost, or ASU 2017-07. This amendment requires entities to disaggregate the service cost component from the other components of the benefit cost and present the service cost component in the same income statement line item as other employee compensation costs arising from services rendered by the pertinent employees during the period. The other components of net benefit cost are required to be presented in the income statement separately from the service cost component and outside a subtotal of income from operations. Certain of our defined benefit plans have previously been frozen, resulting in no annual service costs, and the remaining service costs for our non-frozen plan are not material. We adopted ASU 2017-07 on January 1, 2018, and it did not have a material impact on our results of operations, cash flows or consolidated financial position.

In December 2016, the FASB issued Accounting Standards Update No. 2016-20, Technical Corrections and Improvements to Topic 606, Revenue from Contracts with Customers. In May 2016, the FASB issued Accounting Standards Update No. 2016-12, Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients. In April 2016, the FASB issued Accounting Standards Update No. 2016-10, Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing. In March 2016, the FASB issued Accounting Standards Update No. 2016-08, Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross verses Net). These updates provide additional clarification and implementation guidance on the previously issued Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers (Topic 606). Collectively, these updates require a company to recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. These updates supersede almost all existing revenue recognition guidance under GAAP, with certain exceptions, including an exception for our premium revenues, which are recorded on the Premiums line item on our consolidated statements of income and will continue to be accounted for in accordance with the provisions of ASC Topic 944, Financial Services - Insurance. Our administrative service and other contracts that are subject to these Accounting Standards Updates are recorded in the Administrative fees and other revenue line item on our consolidated statements of income and represents approximately 6% of our consolidated total operating revenue. We adopted these standards on January 1, 2018 using the modified retrospective approach. The adoption of these standards did not have a material impact on our beginning retained earnings, results of operations, cash flows or consolidated financial position.

In November 2016, the FASB issued Accounting Standards Update No. 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash, or ASU 2016-18. This update amends ASC Topic 230, Statement of Cash Flow, to add and clarify guidance on the classification and presentation of restricted cash in the statement of cash flows. The guidance requires entities to show the changes in the total of cash, cash equivalents, restricted cash and restricted cash equivalents in the statement of cash flows. We adopted ASU 2016-18 on January 1, 2018 using a retrospective approach. The adoption of ASU 2016-18 did not have a material impact on our consolidated statements of cash flows and did not impact our results of operations or consolidated financial position.

In August 2016, the FASB issued Accounting Standards Update No. 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments, or ASU 2016-15. This update addresses the presentation and classification on the statement of cash flows for eight specific items, with the objective of reducing existing diversity in practice in how certain cash receipts and cash payments are presented and classified. We adopted ASU 2016-15 on January 1, 2018. The adoption of ASU 2016-15 did not have a material impact on our consolidated statements of cash flows, results of operations or consolidated financial position.

In January 2016, the FASB issued Accounting Standards Update No. 2016-01, Financial Instruments - Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities, or ASU 2016-01. The amendments in ASU 2016-01 change the accounting for non-consolidated equity investments that are not accounted for under the equity method of accounting by requiring changes in fair value to be recognized in income. Additionally, ASU 2016-01 simplifies the impairment assessment of equity investments without readily determinable fair values; requires entities to use the exit price when estimating the fair value of financial instruments; and modifies various presentation disclosure requirements for financial instruments. We adopted ASU 2016-01 on January 1, 2018 as a cumulative-effect adjustment and reclassified $320 of unrealized gains on equity investments, net of tax, from accumulated other comprehensive loss to retained earnings on our consolidated balance sheet. Effective January 1, 2018, our results of operations include the changes in fair value of these financial instruments.

Recent Accounting Guidance Not Yet Adopted: In November 2018, the FASB issued Accounting Standards Update No. 2018-19, Codification Improvements to Topic 326, Financial Instruments - Credit Losses, or ASU 2018-19. The amendments in ASU 2018-19 provide additional clarification and implementation guidance on certain aspects of the previously issued Accounting Standards Update No. 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, or ASU 2016-13, and have the same effective date and transition requirements as ASU 2016-13. ASU 2016-13 introduces a current expected credit loss model for measuring expected credit losses for certain types of financial instruments held at the reporting date based on historical experience, current conditions and reasonable supportable forecasts. ASU 2016-13 replaces the current incurred loss model for measuring expected credit losses, requires expected losses on available-for-sale debt securities to be recognized through an allowance for credit losses rather than as reductions in the amortized cost of the securities and provides for additional disclosure requirements. ASU 2016-13 is effective for us on January 1, 2020, with early adoption permitted. We are currently evaluating the effects the adoption of ASU 2016-13 will have on our consolidated financial statements, results of operations and cash flows.

In August 2018, the FASB issued Accounting Standards Update No. 2018-15, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Customer's Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement that is a Service Contract, or ASU 2018-15. The amendments in ASU 2018-15 require implementation costs incurred by customers in cloud computing arrangements to be deferred and recognized over the term of the arrangement, if those costs would be capitalized by the customer in a software licensing arrangement under the internal-use software guidance. The amendments also require an entity to disclose the nature of its hosting arrangements and adhere to certain presentation requirements in its balance sheet, income statement and statement of cash flows. ASU 2018-15 is effective for us on January 1, 2020, with early adoption permitted. The guidance can be applied either prospectively to all implementation costs incurred after the date of adoption or retrospectively. We are currently evaluating the effects the adoption of ASU 2018-15 will have on our consolidated financial position, results of operations and cash flows.

In August 2018, the FASB issued Accounting Standards Update No. 2018-14, Compensation—Retirement Benefits - Defined Benefit Plans—General (Subtopic 715-20): Disclosure Framework—Changes to the Disclosure Requirements for Defined Benefit Plans, or ASU 2018-14. The amendments in ASU 2018-14 eliminate, add, and modify certain disclosure requirements for employers that sponsor defined benefit pension or other postretirement plans. The amendments are effective for our annual reporting periods beginning after December 15, 2020, with early adoption permitted. The guidance is to be applied on a retrospective basis to all periods presented. We are currently evaluating the effects the adoption of ASU 2018-14 will have on our disclosures.

In August 2018, the FASB issued Accounting Standards Update No. 2018-12, Financial Services—Insurance (Topic 944): Targeted Improvements to the Accounting for Long-Duration Contracts, or ASU 2018-12. The amendments in ASU 2018-12 make changes to a variety of areas to simplify or improve the existing recognition, measurement, presentation and disclosure requirements for long-duration contracts issued by an insurance entity. The amendments require insurers to annually review the assumptions they make about their policyholders and update the liabilities for future policy benefits if the assumptions change. The amendments also simplify the amortization of deferred contract acquisition costs and add new disclosure requirements about the assumptions insurers use to measure their liabilities and how they may affect future cash flows. The amendments in ASU 2018-12 will be effective for our interim and annual reporting periods beginning after December 15, 2020. The amendments related to the liability for future policy benefits for traditional and limited-payment contracts and deferred acquisition costs are to be applied to contracts in force as of the beginning of the earliest period presented, with an option to apply such amendments retrospectively with a cumulative-effect adjustment to the opening balance of retained earnings as of the earliest period presented. The amendments for market risk benefits are to be applied retrospectively. We are currently evaluating the effects the adoption of ASU 2018-12 will have on our consolidated financial position, results of operations, cash flows, and related disclosures.

In January 2017, the FASB issued Accounting Standards Update No. 2017-04, Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment, or ASU 2017-04. This update removes Step 2 of the goodwill impairment test under current guidance, which requires a hypothetical purchase price allocation. The new guidance requires an impairment charge to be recognized for the amount by which the carrying amount exceeds the reporting unit's fair value. Upon adoption, the guidance is to be applied prospectively. ASU 2017-04 is effective for us on January 1, 2020, with early adoption permitted. The adoption of ASU 2017-04 is not expected to have a material impact on our consolidated financial position, results of operations or cash flows.

There were no other new accounting pronouncements that were issued or became effective since the issuance of our 2018 Annual Report on Form 10-K that had, or are expected to have, a material impact on our consolidated financial position, results of operations or cash flows.

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Business Acquisitions

3 Months Ended

Mar. 31, 2019

Business Combinations [Abstract]

Business Acquisitions

Business Acquisitions

Acquisition of America’s 1st Choice

On February 15, 2018, we completed our acquisition of Freedom Health, Inc., Optimum HealthCare, Inc., America’s 1st Choice of South Carolina, Inc. and related entities, or collectively, America’s 1st Choice, a Medicare Advantage organization that offers HMO products, including Chronic Special Needs Plans and Dual-Eligible Special Needs Plans under its Freedom Health and Optimum HealthCare brands in Florida and its America’s 1st Choice of South Carolina brand in South Carolina. At the time of acquisition, through its Medicare Advantage plans, America’s 1st Choice served approximately one hundred and thirty-five thousand members in twenty-five Florida and three South Carolina counties. This acquisition aligns with our plans for continued growth in the Medicare Advantage and Special Needs populations.

In accordance with FASB accounting guidance for business combinations, the consideration transferred was allocated to the fair value of America’s 1st Choice’s assets acquired and liabilities assumed, including identifiable intangible assets. The excess of the consideration transferred over the fair value of net assets acquired resulted in goodwill of $1,029 at March 31, 2019, of which $296 was tax deductible. All of the goodwill was allocated to our Government Business segment. Goodwill recognized from the acquisition of America’s 1st Choice primarily relates to the future economic benefits arising from the assets acquired and is consistent with our stated intentions to strengthen our position and expand operations in the government sector to service Medicare Advantage and Special Needs populations.

The fair value of the net assets acquired from America’s 1st Choice includes $711 of other intangible assets at March 31, 2019, which primarily consist of finite-lived customer relationships with amortization periods ranging from 9 to 13 years. The results of operations of America’s 1st Choice are included in our consolidated financial statements within our Government Business segment for the periods following February 15, 2018. The pro forma effects of this acquisition for prior periods were not material to our consolidated results of operations.

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Investments

3 Months Ended

Mar. 31, 2019

Investments [Abstract]

Investments

Investments

Fixed Maturity Securities

We evaluate our available-for-sale fixed maturity securities for other-than-temporary declines based on qualitative and quantitative factors. There were no individually significant other-than-temporary impairment losses on investments during the three months ended March 31, 2019 and 2018. We continue to review our investment portfolios under our impairment review policy. Given the inherent uncertainty of changes in market conditions and the significant judgments involved, there is a continuing risk that further declines in fair value may occur and additional material other-than-temporary impairment, or OTTI, losses on investments may be recorded in future periods.

A summary of current and long-term fixed maturity securities, available-for-sale, at March 31, 2019 and December 31, 2018 is as follows:

													Non-Credit Component of OTTIs Recognized in Accumulated Other Comprehensive Loss
	Cost or Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses						Estimated Fair Value
					Less than 12 Months			12 Months or Greater
March 31, 2019
Fixed maturity securities:
United States Government securities	$	388	$	6	$	—		$	(1	)	$	393	$	—
Government sponsored securities	139		2		—			(1		)	140		—
States, municipalities and political subdivisions, tax-exempt	4,523		173		—			(3		)	4,693		—
Corporate securities	8,594		132		(24		)	(60		)	8,642		(3		)
Residential mortgage-backed securities	3,034		48		(1		)	(24		)	3,057		—
Commercial mortgage-backed securities	79		1		—			(1		)	79		—
Other securities	1,275		17		(3		)	(6		)	1,283		—
Total fixed maturity securities	$	18,032	$	379	$	(28	)	$	(96	)	$	18,287	$	(3	)
December 31, 2018
Fixed maturity securities:
United States Government securities	$	414	$	3	$	—		$	(1	)	$	416	$	—
Government sponsored securities	108		1		—			(1		)	108		—
States, municipalities and political subdivisions, tax-exempt	4,716		91		(3		)	(19		)	4,785		—
Corporate securities	8,189		33		(170		)	(115		)	7,937		(3		)
Residential mortgage-backed securities	2,769		31		(3		)	(47		)	2,750		—
Commercial mortgage-backed securities	69		—		—			(2		)	67		—
Other securities	1,115		14		(8		)	(5		)	1,116		—
Total fixed maturity securities	$	17,380	$	173	$	(184	)	$	(190	)	$	17,179	$	(3	)

For fixed maturity securities in an unrealized loss position at March 31, 2019 and December 31, 2018, the following table summarizes the aggregate fair values and gross unrealized losses by length of time those securities have continuously been in an unrealized loss position:

	Less than 12 Months						12 Months or Greater
(Securities are whole amounts)	Number of Securities	Estimated Fair Value		Gross Unrealized Loss			Number of Securities	Estimated Fair Value		Gross Unrealized Loss
March 31, 2019
Fixed maturity securities:
United States Government securities	8	$	39	$	—		16	$	65	$	(1	)
Government sponsored securities	7	6		—			28	29		(1		)
States, municipalities and political subdivisions, tax-exempt	13	17		—			199	288		(3		)
Corporate securities	586	1,068		(24		)	1,295	2,273		(60		)
Residential mortgage-backed securities	87	157		(1		)	764	1,372		(24		)
Commercial mortgage-backed securities	—	—		—			12	23		(1		)
Other securities	125	413		(3		)	142	368		(6		)
Total fixed maturity securities	826	$	1,700	$	(28	)	2,456	$	4,418	$	(96	)
December 31, 2018
Fixed maturity securities:
United States Government securities	5	$	47	$	—		25	$	79	$	(1	)
Government sponsored securities	8	11		—			24	31		(1		)
States, municipalities and political subdivisions, tax-exempt	177	295		(3		)	604	1,032		(19		)
Corporate securities	2,185	4,503		(170		)	1,220	2,072		(115		)
Residential mortgage-backed securities	259	383		(3		)	816	1,458		(47		)
Commercial mortgage-backed securities	6	11		—			19	37		(2		)
Other securities	193	599		(8		)	93	237		(5		)
Total fixed maturity securities	2,833	$	5,849	$	(184	)	2,801	$	4,946	$	(190	)

The amortized cost and fair value of fixed maturity securities at March 31, 2019, by contractual maturity, are shown below. Expected maturities may differ from contractual maturities because the issuers of the securities may have the right to prepay obligations.

	Amortized Cost		Estimated Fair Value
Due in one year or less	$	541	$	542
Due after one year through five years	5,431		5,466
Due after five years through ten years	5,068		5,153
Due after ten years	3,879		3,990
Mortgage-backed securities	3,113		3,136
Total fixed maturity securities	$	18,032	$	18,287

Proceeds from sales, maturities, calls or redemptions of fixed maturity securities and the related gross realized gains and gross realized losses for the three months ended March 31, 2019 and 2018 are as follows:

	Three Months Ended   March 31
	2019			2018
Proceeds	$	1,468		$	2,227
Gross realized gains	18			30
Gross realized losses	(17		)	(36		)

In the ordinary course of business, we may sell securities at a loss for a number of reasons, including, but not limited to: (i) changes in the investment environment; (ii) expectation that the fair value could deteriorate further; (iii) desire to reduce exposure to an issuer or an industry; (iv) changes in credit quality; or (v) changes in expected cash flow.

All securities sold resulting in investment gains and losses are recorded on the trade date. Realized gains and losses are determined on the basis of the cost or amortized cost of the specific securities sold.

Equity Securities

A summary of current and long-term marketable equity securities at March 31, 2019 and December 31, 2018 is as follows:

	March 31, 2019		December 31, 2018
Equity securities:
Exchange traded funds	$	2	$	2
Fixed maturity mutual funds	589		557
Common equity securities	356		654
Private equity securities	297		313
Total	$	1,244	$	1,526

The gains and losses related to equity securities for the three months ended March 31, 2019 and 2018 are as follows:

	Three Months Ended   March 31
	2019			2018
Net realized gains (losses) recognized on equity securities	$	79		$	(43	)
Less: Net realized gains recognized on equity securities sold during the period	(21		)	(173		)
Unrealized gains (losses) recognized on equity securities still held at March 31, 2019	$	58		$	(216	)

Securities Lending Programs

We participate in securities lending programs whereby marketable securities in our investment portfolio are transferred to independent brokers or dealers in exchange for cash and securities collateral. The fair value of the collateral received at the time of the transactions amounted to $590 and $604 at March 31, 2019 and December 31, 2018, respectively. The value of the collateral represented 103% and 102% of the market value of the securities on loan at March 31, 2019 and December 31, 2018, respectively. We recognize the collateral as an asset under the caption “Securities lending collateral” on our consolidated balance sheets and we recognize a corresponding liability for the obligation to return the collateral to the borrower under the caption “Securities lending payable.” The securities on loan are reported in the applicable investment category on our consolidated balance sheets.

The remaining contractual maturity of our securities lending agreements at March 31, 2019 is as follows:

	Overnight and Continuous
Securities lending transactions
United States Government securities	$	25
Corporate securities	545
Equity securities	20
Total	$	590

The market value of loaned securities and that of the collateral pledged can fluctuate in non-synchronized fashions. To the extent the loaned securities' value appreciates faster or depreciates slower than the value of the collateral pledged, we are exposed to the risk of the shortfall. As a primary mitigating mechanism, the loaned securities and collateral pledged are marked to market on a daily basis and the shortfall, if any, is collected accordingly. Secondarily, the minimum collateral level is set at 102% of the value of the loaned securities, which provides a cushion before any shortfall arises. The investment of the cash collateral is subject to market risk, which is managed by limiting the investments to higher quality and shorter duration instruments.

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Derivative Financial Instruments Derivative Financial Instruments

3 Months Ended

Mar. 31, 2019

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivative Financial Instruments

Derivative Financial Instruments

We primarily invest in the following types of derivative financial instruments: interest rate swaps, futures, forward contracts, put and call options, swaptions, embedded derivatives and warrants. We also enter into master netting agreements which reduce credit risk by permitting net settlement of transactions.

We have entered into various interest rate swap contracts to convert a portion of our interest rate exposure on our long-term debt from fixed rates to floating rates. The floating rates payable on all of our fair value hedges are benchmarked to the London Interbank Offering Rate, or LIBOR.

Prior to 2019, we entered into a series of forward starting pay fixed interest rate swaps with the objective of reducing the variability of cash flows in the interest payments on anticipated future financings. The unrecognized loss for all expired and terminated cash flow hedges included in accumulated other comprehensive loss, net of tax, was $243 and $246 at March 31, 2019 and December 31, 2018, respectively.

For additional information relating to the fair value of our derivative assets and liabilities, see Note 6, “Fair Value,” of this Form 10-Q.

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Fair Value

3 Months Ended

Mar. 31, 2019

Fair Value Disclosures [Abstract]

Fair Value

Fair Value

Assets and liabilities recorded at fair value in our consolidated balance sheets are categorized based upon the level of judgment associated with the inputs used to measure their fair value. Level inputs, as defined by FASB guidance for fair value measurements and disclosures, are as follows:

Level Input	Input Definition
Level I	Inputs are unadjusted, quoted prices for identical assets or liabilities in active markets at the measurement date.
Level II	Inputs other than quoted prices included in Level I that are observable for the asset or liability through corroboration with market data at the measurement date.
Level III	Unobservable inputs that reflect management’s best estimate of what market participants would use in pricing the asset or liability at the measurement date.

The following methods, assumptions and inputs were used to determine the fair value of each class of the following assets and liabilities recorded at fair value in our consolidated balance sheets:

Cash equivalents: Cash equivalents primarily consist of highly rated money market funds with maturities of three months or less and are purchased daily at par value with specified yield rates. Due to the high ratings and short-term nature of the funds, we designate all cash equivalents as Level I.

Fixed maturity securities, available-for-sale: Fair values of available-for-sale fixed maturity securities are based on quoted market prices, where available. These fair values are obtained primarily from third party pricing services, which generally use Level I or Level II inputs for the determination of fair value to facilitate fair value measurements and disclosures. Level II securities primarily include United States Government securities, corporate securities, securities from states, municipalities and political subdivisions, mortgage-backed securities and certain other asset-backed securities. For securities not actively traded, the pricing services may use quoted market prices of comparable instruments or discounted cash flow analyses, incorporating inputs that are currently observable in the markets for similar securities. We have controls in place to review the pricing services’ qualifications and procedures used to determine fair values. In addition, we periodically review the pricing services’ pricing methodologies, data sources and pricing inputs to ensure the fair values obtained are reasonable. Inputs that are often used in the valuation methodologies include, but are not limited to, broker quotes, benchmark yields, credit spreads, default rates and prepayment speeds. We also have certain fixed maturity securities, primarily corporate debt securities, which are designated Level III securities. For these securities, the valuation methodologies may incorporate broker quotes or discounted cash flow analyses using assumptions for inputs such as expected cash flows, benchmark yields, credit spreads, default rates and prepayment speeds that are not observable in the markets.

Equity securities: Fair values of equity securities are generally designated as Level I and are based on quoted market prices. For certain equity securities, quoted market prices for the identical security are not always available and the fair value is estimated by reference to similar securities for which quoted prices are available. These securities are designated Level II. We also have certain equity securities, including private equity securities, for which the fair value is estimated based on each security’s current condition and future cash flow projections. Such securities are designated Level III. The fair values of these private equity securities are generally based on either broker quotes or discounted cash flow projections using assumptions for inputs such as the weighted-average cost of capital, long-term revenue growth rates and earnings before interest, taxes, depreciation and amortization, and/or revenue multiples that are not observable in the markets.

Other invested assets, current: Other invested assets, current include securities held in rabbi trusts that are classified as trading. These securities are designated Level I securities, as fair values are based on quoted market prices.

Securities lending collateral: Fair values of securities lending collateral are based on quoted market prices, where available. These fair values are obtained primarily from third party pricing services, which generally use Level I or Level II inputs for the determination of fair value, to facilitate fair value measurements and disclosures.

Derivatives: Fair values are based on the quoted market prices by the financial institution that is the counterparty to the derivative transaction. We independently verify prices provided by the counterparties using valuation models that incorporate observable market inputs for similar derivative transactions. Derivatives are designated as Level II securities. Derivatives presented within the fair value hierarchy table below are presented on a gross basis and not on a master netting basis by counterparty.

A summary of fair value measurements by level for assets and liabilities measured at fair value on a recurring basis at March 31, 2019 and December 31, 2018 is as follows:

	Level I		Level II			Level III		Total
March 31, 2019
Assets:
Cash equivalents	$	2,551	$	—		$	—	$	2,551
Fixed maturity securities, available-for-sale:
United States Government securities	—		393			—		393
Government sponsored securities	—		140			—		140
States, municipalities and political subdivisions, tax-exempt	—		4,693			—		4,693
Corporate securities	—		8,345			297		8,642
Residential mortgage-backed securities	—		3,051			6		3,057
Commercial mortgage-backed securities	—		79			—		79
Other securities	—		1,269			14		1,283
Total fixed maturity securities, available-for-sale	—		17,970			317		18,287
Equity securities:
Exchange traded funds	2		—			—		2
Fixed maturity mutual funds	—		589			—		589
Common equity securities	315		41			—		356
Private equity securities	—		—			297		297
Total equity securities	317		630			297		1,244
Other invested assets, current	20		—			—		20
Securities lending collateral	—		591			—		591
Derivatives	—		15			—		15
Total assets	$	2,888	$	19,206		$	614	$	22,708
Liabilities:
Derivatives	$	—	$	(12	)	$	—	$	(12	)
Total liabilities	$	—	$	(12	)	$	—	$	(12	)
December 31, 2018
Assets:
Cash equivalents	$	1,815	$	—		$	—	$	1,815
Fixed maturity securities, available-for-sale:
United States Government securities	—		416			—		416
Government sponsored securities	—		108			—		108
States, municipalities and political subdivisions, tax-exempt	—		4,785			—		4,785
Corporate securities	2		7,648			287		7,937
Residential mortgage-backed securities	—		2,744			6		2,750
Commercial mortgage-backed securities	—		67			—		67
Other securities	—		1,099			17		1,116
Total fixed maturity securities, available-for-sale	2		16,867			310		17,179
Equity securities:
Exchange traded funds	2		—			—		2
Fixed maturity mutual funds	—		557			—		557
Common equity securities	601		53			—		654
Private equity securities	—		—			313		313
Total equity securities	603		610			313		1,526
Other invested assets, current	21		—			—		21
Securities lending collateral	314		290			—		604
Derivatives	—		16			—		16
Total assets	$	2,755	$	17,783		$	623	$	21,161
Liabilities:
Derivatives	$	—	$	(17	)	$	—	$	(17	)
Total liabilities	$	—	$	(17	)	$	—	$	(17	)

A reconciliation of the beginning and ending balances of assets measured at fair value on a recurring basis using Level III inputs for the three months ended March 31, 2019 and 2018 is as follows:

	Corporate Securities			Residential Mortgage- backed Securities		Other  Securities			Equity Securities			Total
Three Months Ended March 31, 2019
Beginning balance at January 1, 2019	$	287		$	6	$	17		$	313		$	623
Total (losses) gains:
Recognized in net income	(1		)	—		—			(2		)	(3		)
Recognized in accumulated other comprehensive loss	2			—		—			—			2
Purchases	33			—		2			7			42
Sales	(1		)	—		—			(21		)	(22		)
Settlements	(21		)	—		(1		)	—			(22		)
Transfers into Level III	—			—		3			—			3
Transfers out of Level III	(2		)	—		(7		)	—			(9		)
Ending balance at March 31, 2019	$	297		$	6	$	14		$	297		$	614
Change in unrealized losses included in net income related to assets still held at March 31, 2019	$	—		$	—	$	—		$	(2	)	$	(2	)
Three Months Ended March 31, 2018
Beginning balance at January 1, 2018	$	229		$	5	$	16		$	287		$	537
Total losses recognized in net income	—			—		—			(239		)	(239		)
Purchases	20			—		—			256			276
Sales	(4		)	—		—			(1		)	(5		)
Settlements	(6		)	—		(1		)	—			(7		)
Transfers into Level III	21			—		—			—			21
Transfers out of Level III	—			—		(1		)	—			(1		)
Ending balance at March 31, 2018	$	260		$	5	$	14		$	303		$	582
Change in unrealized losses included in net income related to assets still held at March 31, 2018	$	(1	)	$	—	$	—		$	—		$	(1	)

There were no individually material transfers into or out of Level III during the three months ended March 31, 2019 or 2018.

Certain assets and liabilities are measured at fair value on a nonrecurring basis; that is, the instruments are not measured at fair value on an ongoing basis but are subject to fair value adjustments only in certain circumstances. As disclosed in Note 3, “Business Acquisitions,” we completed our acquisition of America's 1st Choice on February 15, 2018. The net assets acquired in our acquisition of America's 1st Choice and resulting goodwill and other intangible assets were recorded at fair value primarily using Level III inputs. The majority of America's 1st Choice's assets acquired and liabilities assumed were recorded at their carrying values as of the respective date of acquisition, as their carrying values approximated their fair values due to their short-term nature. The fair values of goodwill and other intangible assets acquired in our acquisition of America's 1st Choice were internally estimated based on the income approach. The income approach estimates fair value based on the present value of the cash flows that the assets could be expected to generate in the future. We developed internal estimates for the expected cash flows and discount rate in the present value calculation. Other than the assets acquired and liabilities assumed in our acquisition of America's 1st Choice described above, there were no material assets or liabilities measured at fair value on a nonrecurring basis during the three months ended March 31, 2019 or 2018.

Our valuation policy is determined by members of our treasury and accounting departments. Whenever possible, our policy is to obtain quoted market prices in active markets to estimate fair values for recognition and disclosure purposes. Where quoted market prices in active markets are not available, fair values are estimated using discounted cash flow analyses, broker quotes or other valuation techniques. These techniques are significantly affected by our assumptions, including discount rates and estimates of future cash flows. Potential taxes and other transaction costs are not considered in estimating fair values. Our valuation policy is generally to obtain quoted prices for each security from third party pricing services, which are derived through recently reported trades for identical or similar securities making adjustments through the reporting date based upon available market observable information. As we are responsible for the determination of fair value, we perform a monthly analysis on the prices received from the pricing services to determine whether the prices are reasonable estimates of fair value. This analysis is performed by our internal treasury personnel who are familiar with our investment portfolios, the pricing services engaged and the valuation techniques and inputs used. Our analysis includes procedures such as a review of month-to-month price fluctuations and price comparisons to secondary pricing services. There were no adjustments to quoted market prices obtained from the pricing services during the three months ended March 31, 2019 or 2018.

In addition to the preceding disclosures on assets recorded at fair value in the consolidated balance sheets, FASB guidance also requires the disclosure of fair values for certain other financial instruments for which it is practicable to estimate fair value, whether or not such values are recognized in our consolidated balance sheets.

Non-financial instruments such as real estate, property and equipment, other current assets, deferred income taxes, intangible assets and certain financial instruments, such as policy liabilities, are excluded from the fair value disclosures. Therefore, the fair value amounts cannot be aggregated to determine our underlying economic value.

The carrying amounts reported in our consolidated balance sheets for cash, accrued investment income, premium receivables, self-funded receivables, other receivables, income taxes receivable/payable, unearned income, accounts payable and accrued expenses, security trades pending payable, securities lending payable and certain other current liabilities approximate fair value because of the short term nature of these items. These assets and liabilities are not listed in the table below.

The following methods and assumptions were used to estimate the fair value of each class of financial instrument that is recorded at its carrying value in our consolidated balance sheets:

Other invested assets, long-term: Other invested assets, long-term include primarily our investments in limited partnerships, joint ventures and other non-controlled corporations, as well as the cash surrender value of corporate-owned life insurance policies. Investments in limited partnerships, joint ventures and other non-controlled corporations are carried at our share in the entities’ undistributed earnings, which approximates fair value. The carrying value of corporate-owned life insurance policies represents the cash surrender value as reported by the respective insurer, which approximates fair value.

Short-term borrowings: The fair value of our short-term borrowings is based on quoted market prices for the same or similar debt, or, if no quoted market prices were available, on the current market interest rates estimated to be available to us for debt of similar terms and remaining maturities.

Long-term debt – commercial paper: The carrying amount for commercial paper approximates fair value, as the underlying instruments have variable interest rates at market value.

Long-term debt – senior unsecured notes and surplus notes: The fair values of our notes are based on quoted market prices in active markets for the same or similar debt, or, if no quoted market prices are available, on the current market observable rates estimated to be available to us for debt of similar terms and remaining maturities.

Long-term debt – convertible debentures: The fair value of our convertible debentures is based on the quoted market price in the active private market in which the convertible debentures trade.

A summary of the estimated fair values by level of each class of financial instrument that is recorded at its carrying value on our consolidated balance sheets at March 31, 2019 and December 31, 2018 is as follows:

	Carrying Value		Estimated Fair Value
			Level I		Level II		Level III		Total
March 31, 2019
Assets:
Other invested assets, long-term	$	3,710	$	—	$	—	$	3,710	$	3,710
Liabilities:
Debt:
Short-term borrowings	1,095		—		1,095		—		1,095
Commercial paper	875		—		875		—		875
Notes	17,191		—		17,752		—		17,752
Convertible debentures	181		—		1,071		—		1,071
December 31, 2018
Assets:
Other invested assets, long-term	$	3,726	$	—	$	—	$	3,726	$	3,726
Liabilities:
Debt:
Short-term borrowings	1,145		—		1,145		—		1,145
Commercial paper	697		—		697		—		697
Notes	17,178		—		17,145		—		17,145
Convertible debentures	191		—		1,030		—		1,030

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Income Taxes

3 Months Ended

Mar. 31, 2019

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

During the three months ended March 31, 2019 and 2018, we recognized income tax expense of $394 and $468, respectively, which represent effective tax rates of 20.3% and 26.3%, respectively. The decrease in income tax expense and effective tax rate was primarily due to the suspension of the non-tax deductible Health Insurance Provider Fee, or HIP Fee, for 2019, which resulted in a decrease of income tax expense of $83.

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Retirement Benefits

3 Months Ended

Mar. 31, 2019

Defined Benefit Plan [Abstract]

Retirement Benefits

Retirement Benefits

The components of net periodic benefit credit included in our consolidated statements of income for the three months ended March 31, 2019 and 2018 are as follows:

	Pension Benefits						Other Benefits
	Three Months Ended   March 31						Three Months Ended   March 31
	2019			2018			2019			2018
Service cost	$	—		$	2		$	—		$	—
Interest cost	16			14			4			4
Expected return on assets	(34		)	(37		)	(5		)	(6		)
Recognized actuarial loss	4			6			—			1
Settlement loss	2			6			—			—
Amortization of prior service credit	—			—			(3		)	(3		)
Net periodic benefit credit	$	(12	)	$	(9	)	$	(4	)	$	(4	)

For the year ending December 31, 2019, no material contributions are expected to be necessary to meet the Employee Retirement Income Security Act of 1974, as amended, or ERISA, required funding levels; however, we may elect to make discretionary contributions up to the maximum amount deductible for income tax purposes. No contributions were made to our retirement benefit plans during the three months ended March 31, 2019 and 2018.

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Medical Claims Payable

3 Months Ended

Mar. 31, 2019

Liability for Claims and Claims Adjustment Expense [Abstract]

Medical Claims payable

Medical Claims Payable

A reconciliation of the beginning and ending balances for medical claims payable, by segment (see Note 15, “Segment Information”), for the three months ended March 31, 2019 is as follows:

	Commercial & Specialty Business			Government Business			Total
Gross medical claims payable, beginning of period	$	2,586		$	4,680		$	7,266
Ceded medical claims payable, beginning of period	(10		)	(24		)	(34		)
Net medical claims payable, beginning of period	2,576			4,656			7,232
Net incurred medical claims:
Current period	5,695			13,099			18,794
Prior periods redundancies	(197		)	(258		)	(455		)
Total net incurred medical claims	5,498			12,841			18,339
Net payments attributable to:
Current period medical claims	3,540			8,623			12,163
Prior periods medical claims	1,766			3,648			5,414
Total net payments	5,306			12,271			17,577
Net medical claims payable, end of period	2,768			5,226			7,994
Ceded medical claims payable, end of period	8			26			34
Gross medical claims payable, end of period	$	2,776		$	5,252		$	8,028

At March 31, 2019, the total of net incurred but not reported liabilities plus expected development on reported claims for the Commercial & Specialty Business was $87, $526 and $2,155 for the claim years 2017 and prior, 2018 and 2019, respectively.

At March 31, 2019, the total of net incurred but not reported liabilities plus expected development on reported claims for the Government Business was $51, $699 and $4,476 for the claim years 2017 and prior, 2018 and 2019, respectively.

A reconciliation of the beginning and ending balances for medical claims payable, by segment (see Note 15, “Segment Information”), for the three months ended March 31, 2018 is as follows:

	Commercial & Specialty Business			Government Business			Total
Gross medical claims payable, beginning of period	$	3,383		$	4,431		$	7,814
Ceded medical claims payable, beginning of period	(78		)	(27		)	(105		)
Net medical claims payable, beginning of period	3,305			4,404			7,709
Business combinations and purchase adjustments	—			199			199
Net incurred medical claims:
Current period	5,745			11,092			16,837
Prior periods redundancies	(335		)	(298		)	(633		)
Total net incurred medical claims	5,410			10,794			16,204
Net payments attributable to:
Current period medical claims	3,739			7,465			11,204
Prior periods medical claims	2,204			3,285			5,489
Total net payments	5,943			10,750			16,693
Net medical claims payable, end of period	2,772			4,647			7,419
Ceded medical claims payable, end of period	2			32			34
Gross medical claims payable, end of period	$	2,774		$	4,679		$	7,453

The reconciliation of net incurred medical claims to benefit expense included in our consolidated statements of income is as follows:

	Three Months Ended   March 31
	2019		2018
Net incurred medical claims:
Commercial & Specialty Business	$	5,498	$	5,410
Government Business	12,841		10,794
Total net incurred medical claims	18,339		16,204
Quality improvement and other claims expense	943		842
Benefit expense	$	19,282	$	17,046

The reconciliation of the medical claims payable reflected in the tables above, to the consolidated ending balance for medical claims payable included in the consolidated balance sheet, as of March 31, 2019, is as follows:

	Commercial & Specialty Business		Government Business		Total
Net medical claims payable, end of period	$	2,768	$	5,226	$	7,994
Ceded medical claims payable, end of period	8		26		34
Insurance lines other than short duration	—		214		214
Gross medical claims payable, end of period	$	2,776	$	5,466	$	8,242

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Debt

3 Months Ended

Mar. 31, 2019

Debt Disclosure [Abstract]

Debt

Debt

We generally issue senior unsecured notes for long-term borrowing purposes. At March 31, 2019 and December 31, 2018, we had $17,166 and $17,153, respectively, outstanding under these notes.

On May 1, 2018, we settled each of the Equity Units stock purchase contracts at a settlement rate of 0.2412 shares of our common stock, using a market value formula set forth in the Equity Units purchase contracts. This resulted in the issuance of approximately 6 shares. We had issued 25 Equity Units on May 12, 2015, pursuant to an underwriting agreement dated May 6, 2015, in an aggregate principal amount of $1,250. Each Equity Unit had a stated amount of $50 (whole dollars) and consisted of a purchase contract obligating the holder to purchase a certain number of shares of our common stock on May 1, 2018, subject to earlier termination or settlement, for a price in cash of $50 (whole dollars); and a 5% undivided beneficial ownership interest in $1,000 (whole dollars) principal amount of our 1.900% remarketable subordinated notes, or RSNs, due 2028. On March 2, 2018, we remarketed the RSNs and used the proceeds to purchase U.S. Treasury securities that were pledged to secure the stock purchase obligations of the holders of the Equity Units. The purchasers of the RSNs transferred the RSNs to us in exchange for $1,250 principal amount of our 4.101% senior notes due 2028, or the 2028 Notes, and a cash payment of $4. We cancelled the RSNs upon receipt and recognized a loss on extinguishment of debt of $19. At the remarketing, we also issued $850aggregate principal amount of 4.550% notes due 2048, or the 2048 Notes, under our shelf registration statement.We used the proceeds from the 2048 Notes for working capital and general corporate purposes. Interest on the 2028 Notes and the 2048 Notes is payable semi-annually in arrears on March 1 and September 1 of each year, commencing on September 1, 2018.

We have an unsecured surplus note with an outstanding principal balance of $25 at both March 31, 2019 and December 31, 2018.

We have a senior revolving credit facility, or the Facility, with a group of lenders for general corporate purposes. The Facility provides credit up to $3,500 and matures on August 25, 2020. There were no amounts outstanding under the Facility at any time during the three months endedMarch 31, 2019 or at December 31, 2018.

Through certain subsidiaries, we have entered into multiple 364-day lines of credit with separate lenders for general corporate purposes. The facilities provide combined credit up to $600. At March 31, 2019 and December 31, 2018, $400 and $500, respectively were outstanding under our 364-day lines of credit.

We have an authorized commercial paper program of up to $2,500, the proceeds of which may be used for general corporate purposes. At March 31, 2019 and December 31, 2018, we had $875 and $697, respectively, outstanding under this program.

We have outstanding senior unsecured convertible debentures due 2042, or the Debentures, which are governed by an indenture between us and The Bank of New York Mellon Trust Company, N.A., as trustee, or the indenture. We have accounted for the Debentures in accordance with the FASB cash conversion guidance for debt with conversion and other options. As a result, the value of the embedded conversion option (net of deferred taxes and equity issuance costs) has been bifurcated from its debt host and recorded as a component of additional paid-in capital in our consolidated balance sheets. During the three months endedMarch 31, 2019, $17 aggregate principal amount of the Debentures were surrendered for conversion by certain holders in accordance with the terms and provisions of the indenture. We elected to settle the excess of the principal amount of the conversions with cash for total payments of $63. We recognized a gain of $1 on the extinguishment of debt related to the Debentures, based on the fair values of the debt on the conversion settlement dates.

The following table summarizes at March 31, 2019 the related balances, conversion rate and conversion price of the Debentures:

Outstanding principal amount	$	270
Unamortized debt discount	$	87
Net debt carrying amount	$	181
Equity component carrying amount	$	98
Conversion rate (shares of common stock per $1,000 of principal amount)	13.8707
Effective conversion price (per $1,000 of principal amount)	$	72.0939

We are a member, through certain subsidiaries, of the Federal Home Loan Bank of Indianapolis, the Federal Home Loan Bank of Cincinnati and the Federal Home Loan Bank of Atlanta, or collectively, the FHLBs. As a member we have the ability to obtain short-term cash advances, subject to certain minimum collateral requirements. We had $695 and $645 in outstanding short-term borrowings from FHLBs, at March 31, 2019 and December 31, 2018 with fixed interest rates of 2.563% and 2.458% respectively.

All debt is a direct obligation of Anthem, Inc., except for the surplus note, the FHLB borrowings, and the 364-day lines of credit.

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Commitments And Contingencies

3 Months Ended

Mar. 31, 2019

Commitments and Contingencies Disclosure [Abstract]

Commitments And Contingencies

Commitments and Contingencies

Litigation and Regulatory Proceedings

In the ordinary course of business, we are defendants in, or parties to, a number of pending or threatened legal actions or proceedings. To the extent a plaintiff or plaintiffs in the following cases have specified in their complaint or in other court filings the amount of damages being sought, we have noted those alleged damages in the descriptions below. With respect to the cases described below, we contest liability and/or the amount of damages in each matter and believe we have meritorious defenses.

Where available information indicates that it is probable that a loss has been incurred as of the date of the consolidated financial statements and we can reasonably estimate the amount of that loss, we accrue the estimated loss by a charge to income. In many proceedings, however, it is difficult to determine whether any loss is probable or reasonably possible. In addition, even where loss is possible or an exposure to loss exists in excess of the liability already accrued with respect to a previously identified loss contingency, it is not always possible to reasonably estimate the amount of the possible loss or range of loss.

With respect to many of the proceedings to which we are a party, we cannot provide an estimate of the possible losses, or the range of possible losses in excess of the amount, if any, accrued, for various reasons, including but not limited to some or all of the following: (i) there are novel or unsettled legal issues presented, (ii) the proceedings are in early stages, (iii) there is uncertainty as to the likelihood of a class being certified or decertified or the ultimate size and scope of the class, (iv) there is uncertainty as to the outcome of pending appeals or motions, (v) there are significant factual issues to be resolved, and/or (vi) in many cases, the plaintiffs have not specified damages in their complaint or in court filings. For those legal proceedings where a loss is probable, or reasonably possible, and for which it is possible to reasonably estimate the amount of the possible loss or range of losses, we currently believe that the range of possible losses, in excess of established reserves is, in the aggregate, from $0 to approximately $250 at March 31, 2019. This estimated aggregate range of reasonably possible losses is based upon currently available information taking into account our best estimate of such losses for which such an estimate can be made.

Blue Cross Blue Shield Antitrust Litigation

We are a defendant in multiple lawsuits that were initially filed in 2012 against the BCBSA and Blue Cross and/or Blue Shield licensees, or Blue plans, across the country. The cases were consolidated into a single multi-district proceeding captioned In re Blue Cross Blue Shield Antitrust Litigation that is pending in the United States District Court for the Northern District of Alabama, or the Court. Generally, the suits allege that the BCBSA and the Blue plans have conspired to horizontally allocate geographic markets through license agreements, best efforts rules that limit the percentage of non-Blue revenue of each plan, restrictions on acquisitions rules governing the BlueCard and National Accounts programs and other arrangements in violation of the Sherman Antitrust Act, or Sherman Act, and related state laws. The cases were brought by two putative nationwide classes of plaintiffs, health plan subscribers and providers, and actions filed in Alabama, Arkansas, California, Florida, Hawaii, Illinois, Indiana, Kansas, Kansas City, Louisiana, Michigan, Minnesota, Mississippi, Missouri, Montana, Nebraska, New Hampshire, North Carolina, North Dakota, Oklahoma, Pennsylvania, South Dakota, Rhode Island, South Carolina, Tennessee, Texas, Vermont and Virginia have been consolidated into the multi-district proceeding.

In response to cross motions for partial summary judgment by plaintiffs and defendants, the Court issued an order in April 2018 determining that the defendants’ aggregation of geographic market allocations and output restrictions are to be analyzed under a per se standard of review, and the BlueCard program and other alleged Section 1 Sherman Act violations are to be analyzed under the rule of reason standard of review. The Court also found that there remain genuine issues of material fact as to whether defendants operate as a single entity with regard to the enforcement of the Blue Cross Blue Shield trademarks. In June 2018, in response to a motion filed by the defendants, the Court certified its April order for interlocutory appeal to the United States Court of Appeals for the Eleventh Circuit, or the Eleventh Circuit. Also in June 2018, the defendants filed, with the Eleventh Circuit, a petition for permission to appeal the April order, which the plaintiffs opposed. In December 2018, the Eleventh Circuit denied the petition. No dates have been set for either the final pretrial conferences or trials in these actions. In March 2019, the Court issued a Fourth Amended Scheduling Order requiring that briefing on motions for class certification and related expert reports, merits and damages expert reports, and certain dispositive motions occur in 2019. We intend to vigorously defend these suits; however, their ultimate outcome cannot be presently determined.

Blue Cross of California Taxation Litigation

In July 2013, our California affiliate Blue Cross of California (doing business as Anthem Blue Cross), or BCC, was named as a defendant in a California taxpayer action filed in Los Angeles County Superior Court, captioned Michael D. Myers v. State Board of Equalization, et al. This action was brought under a California statute that permits an individual taxpayer to sue a governmental agency when the taxpayer believes the agency has failed to enforce governing law. Plaintiff contends that BCC, a licensed Health Care Service Plan, or HCSP, is an “insurer” for purposes of taxation despite acknowledging it is not an “insurer” under regulatory law. At the time, under California law, “insurers” were required to pay a gross premiums tax, or GPT, calculated as 2.35% on gross premiums. As a licensed HCSP, BCC has paid the California Corporate Franchise Tax, or CFT, the tax paid by California businesses generally. Plaintiff contends that BCC must pay the GPT rather than the CFT, and seeks a writ of mandate directing the taxing agencies to collect the GPT and an order requiring BCC to pay GPT back taxes, interest, and penalties for the eight-year period prior to the filing of the complaint.

In March 2018, the Superior Court denied BCC’s motion for judgment on the pleadings and similar motions brought by other entities. We filed a writ of mandate in the California Court of Appeal. Although the California Court of Appeal initially accepted our writ, it later indicated that it will not hear the issues raised by our writ until the case concludes in the Superior Court. Because GPT is constitutionally imposed in lieu of certain other taxes, BCC has filed protective tax refund claims with the City of Los Angeles, the California Department of Health Care Services and the Franchise Tax Board to protect its rights to recover certain taxes previously paid should BCC eventually be determined to be subject to the GPT for the tax periods at issue in the litigation. BCC intends to vigorously defend this suit; however, its ultimate outcome cannot be presently determined.

Express Scripts, Inc. Pharmacy Benefit Management Litigation

In March 2016, we filed a lawsuit against Express Scripts, Inc., or Express Scripts, our vendor for pharmacy benefit management, or PBM, services, captioned Anthem, Inc. v. Express Scripts, Inc., in the U.S. District Court for the Southern District of New York. The lawsuit seeks to recover over $14,800 in damages for pharmacy pricing that is higher than competitive benchmark pricing under the agreement between the parties, or ESI PBM Agreement, over $158 in damages related to operational breaches, as well as various declarations under the ESI PBM Agreement between the parties, including that Express Scripts: (i) breached its obligation to negotiate in good faith and to agree in writing to new pricing terms; (ii) is required to provide competitive benchmark pricing to us through the term of the ESI PBM Agreement; (iii) has breached the ESI PBM Agreement; and (iv) is required under the ESI PBM Agreement to provide post-termination services, at competitive benchmark pricing, for one year following any termination.

Express Scripts has disputed our contractual claims and is seeking declaratory judgments: (i) regarding the timing of the periodic pricing review under the ESI PBM Agreement; and (ii) that it has no obligation to ensure that we receive any specific level of pricing, that we have no contractual right to any change in pricing under the ESI PBM Agreement and that its sole obligation is to negotiate proposed pricing terms in good faith. In the alternative, Express Scripts claims that we have been unjustly enriched by its payment of $4,675 at the time of the ESI PBM Agreement. In March 2017, the court granted our motion to dismiss Express Scripts’ counterclaims for (i) breach of the implied covenant of good faith and fair dealing, and (ii) unjust enrichment with prejudice. The only remaining claims are for breach of contract and declaratory relief. We intend to vigorously pursue our claims and defend against any counterclaims, which we believe are without merit; however, the ultimate outcome cannot be presently determined.

In re Express Scripts/Anthem ERISA Litigation

We are a defendant in a class action lawsuit that was initially filed in June 2016 against Anthem, Inc. and Express Scripts, which has been consolidated into a single multi-district lawsuit captioned In Re Express Scripts/Anthem ERISA Litigation, in the U.S. District Court for the Southern District of New York. The consolidated complaint was filed by plaintiffs against Express Scripts and us on behalf of all persons who are participants in or beneficiaries of any ERISA or non-ERISA healthcare plan from December 1, 2009 to the present in which we provided prescription drug benefits through the ESI PBM Agreement and paid a percentage based co-insurance payment in the course of using that prescription drug benefit. The plaintiffs allege that we breached our duties, either under ERISA or with respect to the implied covenant of good faith and fair dealing implied in the health plans, (i) by failing to adequately monitor Express Scripts’ pricing under the ESI PBM Agreement and (ii) by placing our own pecuniary interest above the best interests of our insureds by allegedly agreeing to higher pricing in the ESI PBM Agreement in exchange for the purchase price for our NextRx PBM business, and (iii) with respect to the non-ERISA members, by negotiating and entering into the ESI PBM Agreement that was allegedly detrimental to the interests of such non-ERISA members. Plaintiffs seek to hold us and Express Scripts jointly and severally liable and to recover all losses suffered by the proposed class, equitable relief, disgorgement of alleged ill-gotten gains, injunctive relief, attorney’s fees and costs and interest.

In April 2017, we filed a motion to dismiss the claims brought against us, and it was granted, without prejudice, in January 2018. Plaintiffs filed a notice of appeal with the United States Court of Appeals for the Second Circuit, which was heard in October 2018. We intend to vigorously defend this suit; however, its ultimate outcome cannot be presently determined.

Cigna Corporation Merger Litigation

In July 2015, we and Cigna Corporation, or Cigna, announced that we entered into the Agreement and Plan of Merger, or Cigna Merger Agreement, pursuant to which we would acquire all outstanding shares of Cigna. In July 2016, the U.S. Department of Justice, or DOJ, along with certain state attorneys general, filed a civil antitrust lawsuit in the U.S. District Court for the District of Columbia, or District Court, seeking to block the merger. In February 2017, Cigna purported to terminate the Cigna Merger Agreement and commenced litigation against us in the Delaware Court of Chancery, or Delaware Court, seeking damages, including the $1,850 termination fee pursuant to the terms of the Cigna Merger Agreement, and a declaratory judgment that its purported termination of the Cigna Merger Agreement was lawful, among other claims, which is captioned Cigna Corp. v. Anthem Inc.

Also in February 2017, we initiated our own litigation against Cigna in the Delaware Court seeking a temporary restraining order to enjoin Cigna from terminating the Cigna Merger Agreement, specific performance compelling Cigna to comply with the Cigna Merger Agreement and damages, which is captioned Anthem Inc. v. Cigna Corp. In April 2017, the U.S. Circuit Court of Appeals for the District of Columbia affirmed the ruling of the District Court, which blocked the merger. In May 2017, after the Delaware Court denied our motion to enjoin Cigna from terminating the Cigna Merger Agreement, we delivered to Cigna a notice terminating the Cigna Merger Agreement.

In the Delaware Court litigation, trial commenced in late February 2019 and concluded in March 2019. The Delaware Court has set closing argument for September 11, 2019. We believe Cigna’s allegations are without merit and we intend to vigorously pursue our claims and defend against Cigna’s allegations; however, the ultimate outcome of our litigation with Cigna cannot be presently determined. In October 2018, a shareholder filed a derivative lawsuit in the State of Indiana Marion County Superior Court, captioned Henry Bittmann, Derivatively, et al. v. Joseph R Swedish, et al., purportedly on behalf of Anthem and its shareholders against certain current and former directors and officers alleging breaches of fiduciary duties, unjust enrichment and corporate waste associated with the Cigna Merger Agreement. This case has been stayed at the request of the parties pending the outcome of our litigation with Cigna in the Delaware Court. This lawsuit’s ultimate outcome cannot be presently determined.

U.S. Department of Justice (DOJ) Civil Investigative Demands

Beginning in December 2016, the DOJ has issued civil investigative demands to us to discover information about our chart review and risk adjustment programs under Parts C and D of the Medicare Program. We understand the DOJ is investigating the programs of other Medicare Advantage health plans, along with providers and vendors. We continue to cooperate with the DOJ’s investigation, and the ultimate outcome cannot presently be determined.

Cyber Attack Regulatory Proceedings and Litigation

In February 2015, we reported that we were the target of a sophisticated external cyber attack. The attackers gained unauthorized access to certain of our information technology systems and obtained personal information related to many individuals and employees, such as names, birth dates, healthcare identification/social security numbers, street addresses, email addresses, phone numbers and employment information, including income data. To date, there is no evidence that credit card or medical information, such as claims, test results or diagnostic codes, were targeted, accessed or obtained, although no assurance can be given that we will not identify additional information that was accessed or obtained.

Upon discovery of the cyber attack, we took immediate action to remediate the security vulnerability and retained a cybersecurity firm to evaluate our systems and identify solutions based on the evolving landscape. We have provided credit monitoring and identity protection services to those who have been affected by this cyber attack. We have continued to implement security enhancements since this incident. We have incurred expenses subsequent to the cyber attack to investigate and remediate this matter and expect to continue to incur expenses of this nature in the foreseeable future. We recognize these expenses in the periods in which they are incurred.

Federal and state agencies, including state insurance regulators, state attorneys general, the Health and Human Services Office of Civil Rights and the Federal Bureau of Investigation, are investigating, or have investigated, events related to the cyber attack, including how it occurred, its consequences and our responses. The investigations have all been resolved with the exception of an ongoing investigation by a multi-state group of Attorneys General, which remains outstanding. Although we are cooperating in this investigation, we may be subject to additional fines or other obligations, which may have an adverse effect on how we operate our business and an adverse effect on our results of operations and financial condition. We intend to vigorously defend the remaining regulatory investigation; however, its ultimate outcome cannot be presently determined.

We have contingency plans and insurance coverage for certain expenses and potential liabilities of this nature and will pursue coverage for all applicable losses; however, the ultimate outcome of our pursuit of insurance coverage cannot be presently determined.

Other Contingencies

From time to time, we and certain of our subsidiaries are parties to various legal proceedings, many of which involve claims for coverage encountered in the ordinary course of business. We, like HMOs and health insurers generally, exclude certain healthcare and other services from coverage under our HMO, PPO and other plans. We are, in the ordinary course of business, subject to the claims of our enrollees arising out of decisions to restrict or deny reimbursement for uncovered services. The loss of even one such claim, if it results in a significant punitive damage award, could have a material adverse effect on us. In addition, the risk of potential liability under punitive damage theories may increase significantly the difficulty of obtaining reasonable settlements of coverage claims.

In addition to the lawsuits described above, we are also involved in other pending and threatened litigation of the character incidental to our business, and are from time to time involved as a party in various governmental investigations, audits, reviews and administrative proceedings. These investigations, audits, reviews and administrative proceedings include routine and special inquiries by state insurance departments, state attorneys general, the U.S. Attorney General and subcommittees of the U.S. Congress. Such investigations, audits, reviews and administrative proceedings could result in the imposition of civil or criminal fines, penalties, other sanctions and additional rules, regulations or other restrictions on our business operations. Any liability that may result from any one of these actions, or in the aggregate, could have a material adverse effect on our consolidated financial position or results of operations.

Contractual Obligations and Commitments

Express Scripts, through our ESI PBM Agreement, is the provider of certain PBM services to our plans. In October 2017, we established a new pharmacy benefits manager, called IngenioRx, and entered into a five-year agreement with CaremarkPCS Health, L.L.C., or CVS Health, which is a subsidiary of CVS Health Corporation, to begin offering PBM solutions, or the CVS PBM Agreement. In January 2019, we exercised our contractual right to terminate the ESI PBM Agreement earlier than the original expiration date of December 31, 2019 due to the recent acquisition of Express Scripts by Cigna. As a result of exercising our early termination right, the ESI PBM Agreement terminated on March 1, 2019, and on March 2, 2019, the twelve-month transition period to migrate the services from Express Scripts began. We expect CVS Health to begin providing certain PBM services to IngenioRx pursuant to the CVS PBM Agreement in the second quarter of 2019. Notwithstanding our termination of the ESI PBM Agreement, the litigation between us and Express Scripts regarding the ESI PBM Agreement continues. In March 2016, we filed a lawsuit against Express Scripts seeking to recover damages for pharmacy pricing that is higher than competitive benchmark pricing, damages related to operational breaches, as well as various declarations under the ESI PBM Agreement between the parties. For additional information regarding this lawsuit, refer to the Litigation and Regulatory Proceedings-Express Scripts, Inc. Pharmacy Benefit Management Litigation section above. We believe we have appropriately recognized all rights and obligations under the ESI PBM Agreement as of March 31, 2019.

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Capital Stock

3 Months Ended

Mar. 31, 2019

Capital [Abstract]

Capital Stock

Capital Stock

Use of Capital – Dividends and Stock Repurchase Program

We regularly review the appropriate use of capital, including acquisitions, common stock and debt security repurchases and dividends to shareholders. The declaration and payment of any dividends or repurchases of our common stock or debt is at the discretion of our Board of Directors and depends upon our financial condition, results of operations, future liquidity needs, regulatory and capital requirements and other factors deemed relevant by our Board of Directors.

A summary of the cash dividend activity for the three months ended March 31, 2019 and 2018 is as follows:

Declaration Date	Record Date	Payment Date	Cash Dividend per Share	Total
Three Months Ended March 31, 2019
January 29, 2019	March 18, 2019	March 29, 2019	$0.80	$	206
Three Months Ended March 31, 2018
January 30, 2018	March 9, 2018	March 23, 2018	$0.75	$	192

On April 23, 2019, our Audit Committee declared a second quarter 2019 dividend to shareholders of $0.80 per share, payable on June 25, 2019 to shareholders of record at the close of business on June 10, 2019.

Under our Board of Directors’ authorization, we maintain a common stock repurchase program. On December 7, 2017, the Board of Directors authorized a $5,000 increase to the common stock repurchase program. Repurchases may be made from time to time at prevailing market prices, subject to certain restrictions on volume, pricing and timing. The repurchases are effected from time to time in the open market, through negotiated transactions, including accelerated share repurchase agreements, and through plans designed to comply with Rule 10b5-1 under the Securities Exchange Act of 1934, as amended. Our stock repurchase program is discretionary, as we are under no obligation to repurchase shares. We repurchase shares under the program when we believe it is a prudent use of capital. The excess cost of the repurchased shares over par value is charged on a pro rata basis to additional paid-in capital and retained earnings.

A summary of common stock repurchases from April 1, 2019 through April 15, 2019 (subsequent to March 31, 2019) and for the three months ended March 31, 2019 and 2018 is as follows:

	April 1, 2019   Through   April 15, 2019		Three Months Ended March 31
			2019		2018
Shares repurchased	0.2		1.1		1.7
Average price per share	$	287.16	$	275.23	$	233.51
Aggregate cost	$	51	$	294	$	394
Authorization remaining at the end of the period	$	5,148	$	5,199	$	6,783

For additional information regarding the use of capital for debt security repurchases, see Note 10, “Debt” of this Form 10-Q and Note 12, “Debt,” to our audited consolidated financial statements as of and for the year ended December 31, 2018 included in our 2018 Annual Report on Form 10-K.

Stock Incentive Plans

A summary of stock option activity for the three months ended March 31, 2019 is as follows:

	Number of Shares		Weighted- Average Option Price per Share		Weighted- Average Remaining Contractual Life (Years)	Aggregate Intrinsic Value
Outstanding at January 1, 2019	3.7		$	149.65
Granted	0.7		307.66
Exercised	(0.5	)	121.08
Forfeited or expired	—		204.80
Outstanding at March 31, 2019	3.9		181.02		6.71	$	423
Exercisable at March 31, 2019	2.4		135.06		5.24	$	360

A summary of the nonvested restricted stock activity, including restricted stock units, for the three months ended March 31, 2019 is as follows:

	Restricted Stock Shares and Units		Weighted- Average Grant Date Fair Value per Share
Nonvested at January 1, 2019	1.7		$	183.32
Granted	0.5		307.59
Vested	(0.7	)	150.13
Forfeited	—		212.54
Nonvested at March 31, 2019	1.5		239.40

During the three months ended March 31, 2019, we granted approximately 0.2 restricted stock units that are contingent upon us achieving earnings targets over the three year period from 2019 to 2021. These grants have been included in the activity shown above, but will be subject to adjustment at the end of 2021 based on results in the three year period.

Fair Value

We use a binomial lattice valuation model to estimate the fair value of all stock options granted. For a more detailed discussion of our stock incentive plan fair value methodology, see Note 14, “Capital Stock,” to our audited consolidated financial statements as of and for the year ended December 31, 2018 included in our 2018 Annual Report on Form 10-K.

The following weighted-average assumptions were used to estimate the fair values of options granted during the three months ended March 31, 2019 and 2018:

	Three Months Ended March 31
	2019		2018
Risk-free interest rate	2.69	%	2.90	%
Volatility factor	25.00	%	30.00	%
Quarterly dividend yield	0.260	%	0.323	%
Weighted-average expected life (years)	4.40		3.70

The following weighted-average fair values per option or share were determined for the three months ended March 31, 2019 and 2018:

	Three Months Ended March 31
	2019		2018
Options granted during the period	$	68.92	$	55.31
Restricted stock awards granted during the period	307.59		232.15

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Accumulated Other Comprehensive Income

3 Months Ended

Mar. 31, 2019

Comprehensive Income (Loss), Net of Tax, Attributable to Parent [Abstract]

Accumulated Other Comprehensive Loss

Accumulated Other Comprehensive Loss

A reconciliation of the components of accumulated other comprehensive loss at March 31, 2019 and 2018 is as follows:

	March 31
	2019			2018
Investments, excluding non-credit component of other-than-temporary impairments:
Gross unrealized gains	$	379		$	239
Gross unrealized losses	(121		)	(220		)
Net pre-tax unrealized gains	258			19
Deferred tax liability	(61		)	(5		)
Net unrealized gains on investments	197			14
Non-credit components of other-than-temporary impairments on investments:
Unrealized losses	(3		)	—
Deferred tax asset	1			—
Net unrealized non-credit component of other-than-temporary impairments on investments	(2		)	—
Cash flow hedges:
Gross unrealized losses	(308		)	(322		)
Deferred tax asset	65			67
Net unrealized losses on cash flow hedges	(243		)	(255		)
Defined benefit pension plans:
Deferred net actuarial loss	(744		)	(612		)
Deferred prior service credits	(1		)	(1		)
Deferred tax asset	191			159
Net unrecognized periodic benefit costs for defined benefit pension plans	(554		)	(454		)
Postretirement benefit plans:
Deferred net actuarial loss	(57		)	(77		)
Deferred prior service costs	31			43
Deferred tax asset	7			9
Net unrecognized periodic benefit costs for postretirement benefit plans	(19		)	(25		)
Foreign currency translation adjustments:
Gross unrealized losses	(3		)	(2		)
Deferred tax asset	1			1
Net unrealized losses on foreign currency translation adjustments	(2		)	(1		)
Accumulated other comprehensive loss	$	(623	)	$	(721	)

Other comprehensive income (loss) reclassification adjustments for the three months ended March 31, 2019 and 2018 are as follows:

	Three Months Ended March 31
	2019		2018
Investments:
Net holding gain (loss) on investment securities arising during the period, net of tax (expense) benefit of $(98) and $77, respectively	$	350	$	(256	)
Reclassification adjustment for net realized loss on investment securities, net of tax benefit of $2 and $3, respectively	7		11
Total reclassification adjustment on investments	357		(245		)
Non-credit component of other-than-temporary impairments on investments:
Cash flow hedges:
Holding gain, net of tax expense of ($0) and ($8), respectively	3		29
Other:
Net change in unrecognized periodic benefit costs for defined benefit pension and postretirement benefit plans, net of tax expense of ($1) and ($3), respectively	3		7
Net gain (loss) recognized in other comprehensive income, net of tax (expense) benefit of ($101) and $63, respectively	$	363	$	(209	)

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Earnings Per Share

3 Months Ended

Mar. 31, 2019

Earnings Per Share [Abstract]

Earnings Per Share

Earnings per Share

The denominator for basic and diluted earnings per share for the three months ended March 31, 2019 and 2018 is as follows:

	Three Months Ended   March 31
	2019	2018
Denominator for basic earnings per share – weighted-average shares	257.1	255.8
Effect of dilutive securities – employee stock options, nonvested restricted stock awards, convertible debentures and equity units	5.2	7.0
Denominator for diluted earnings per share	262.3	262.8

During the three months ended March 31, 2019 and 2018, weighted-average shares related to certain stock options of 0.2 and 0.3, respectively, were excluded from the denominator for diluted earnings per share because the stock options were anti-dilutive.

During the three months ended March 31, 2019, we issued approximately 0.5 restricted stock units under our stock incentive plans, 0.2 of which vesting is contingent upon us meeting specified annual earnings targets for the three year period of 2019 through 2021. During the three months endedMarch 31, 2018, we issued approximately 0.8 restricted stock units under our stock incentive plans, 0.3 of which vesting is contingent upon us meeting specified annual earnings targets for the three year period of 2018 through 2020. The contingent restricted stock units have been excluded from the denominator for diluted earnings per share and will be included only if and when the contingency is met.

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Segment Information

3 Months Ended

Mar. 31, 2019

Segment Reporting [Abstract]

Segment Information

Segment Information

The results of our operations are described through three reportable segments: Commercial & Specialty Business, Government Business and Other, as further described in Note 19, “Segment Information,” to our audited consolidated financial statements as of and for the year ended December 31, 2018 included in our 2018 Annual Report on Form 10-K.

During the fourth quarter of 2018, we reclassified certain ancillary businesses to reflect changes in how our segments are being managed. Amounts for 2018 have been reclassified for comparability.

Financial data by reportable segment for the three months ended March 31, 2019 and 2018 is as follows:

	Commercial & Specialty Business		Government Business		Other			Total
Three Months Ended March 31, 2019
Operating revenue	$	9,392	$	14,993	$	3		$	24,388
Operating gain (loss)	1,587		383		(30		)	1,940
Three Months Ended March 31, 2018
Operating revenue	$	8,951	$	13,390	$	1		$	22,342
Operating gain (loss)	1,409		481		(22		)	1,868

The major product revenues for each of the reportable segments for the three months ended March 31, 2019 and 2018 are as follows:

	Three Months Ended   March 31
	2019		2018
Commercial & Specialty Business
Managed care products	$	7,618	$	7,278
Managed care services	1,366		1,278
Dental/Vision products and services	323		305
Other	85		90
Total Commercial & Specialty Business	9,392		8,951
Government Business
Managed care products	14,819		13,237
Managed care services	174		153
Total Government Business	14,993		13,390
Other
Other	3		1
Total product revenues	$	24,388	$	22,342

The classification between managed care products and managed care services in the above table primarily distinguishes between the levels 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. 

A reconciliation of reportable segments’ operating revenue to the amounts of total revenues included in our consolidated statements of income for the three months ended March 31, 2019 and 2018 is as follows:

	Three Months Ended   March 31
	2019			2018
Reportable segments’ operating revenue	$	24,388		$	22,342
Net investment income	210			229
Net realized gains (losses) on financial instruments	78			(26		)
Other-than-temporary impairment losses recognized in income	(10		)	(8		)
Total revenues	$	24,666		$	22,537

A reconciliation of reportable segments’ operating gain to income before income tax expense included in our consolidated statements of income for the three months ended March 31, 2019 and 2018 is as follows:

	Three Months Ended   March 31
	2019			2018
Reportable segments’ operating gain	$	1,940		$	1,868
Net investment income	210			229
Net realized gains (losses) on financial instruments	78			(26		)
Other-than-temporary impairment losses recognized in income	(10		)	(8		)
Interest expense	(187		)	(184		)
Amortization of other intangible assets	(87		)	(80		)
Gain (loss) on extinguishment of debt	1			(19		)
Income before income tax expense	$	1,945		$	1,780

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Leases

3 Months Ended

Mar. 31, 2019

Leases [Abstract]

Leases

Leases

We lease office space and certain computer and related equipment using noncancelable operating leases. Our leases have remaining lease terms of 1 year to 15 years, one of which includes an option to extend the lease for 10 years.

The information related to our leases is as follows:

	Balance Sheet Location	March 31, 2019
Operating Leases
Right-of-use assets	Other noncurrent assets	$	606
Lease liabilities, current	Other current liabilities	175
Lease liabilities, noncurrent	Other noncurrent liabilities	519

	Three Months Ended   March 31, 2019
Lease Expense
Operating lease expense	$	45
Short-term lease expense	12
Sublease income	(4		)
Total lease expense	$	53
Other information
Operating cash paid for amounts included in the measurement of lease liabilities, operating leases	$	44
Weighted average remaining lease term, operating leases	6.5 years
Weighted average discount rate, operating leases	3.97		%

At March 31, 2019, future lease payments for noncancellable operating leases with initial or remaining terms of one year or more are as follows:

2019 (excluding the three months ended March 31, 2019)	$	134
2020	145
2021	116
2022	102
2023	84
Thereafter	240
Total future minimum payments	821
Less imputed interest	(127		)
Total lease liabilities	$	694

As of March 31, 2019, we have an additional operating lease with undiscounted lease payments of $104 for a building space that the lessor and its agents are currently building. The lease has a lease term of 12 years and is expected to commence in 2020 when the construction is completed and we take possession of the building

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Basis of Presentation and Significant Accounting Policies (Policies)

3 Months Ended

Mar. 31, 2019

Accounting Policies [Abstract]

Basis of Presentation

Basis of Presentation: The accompanying unaudited consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles, or GAAP, for interim financial reporting. Accordingly, they do not include all of the information and footnotes required by GAAP for annual financial statements. We have omitted certain footnote disclosures that would substantially duplicate the disclosures in our 2018 Annual Report on Form 10-K, unless the information contained in those disclosures materially changed or is required by GAAP. Certain prior year amounts have been reclassified to conform to the current year presentation or adjusted to conform to the current year rounding convention of reporting financial data in whole millions of dollars, except as otherwise noted. In the opinion of management, all adjustments, including normal recurring adjustments, necessary for a fair statement of the consolidated financial statements as of and for the three months ended March 31, 2019 and 2018 have been recorded. The results of operations for the three months ended March 31, 2019 are not necessarily indicative of the results that may be expected for the full year ending December 31, 2019, or any other period. These unaudited consolidated financial statements should be read in conjunction with our audited consolidated financial statements as of and for the year ended December 31, 2018 included in our 2018 Annual Report on Form 10-K.

Foreign Currency

Certain of our subsidiaries operate outside of the United States and have functional currencies other than the U.S. dollar, or USD. We translate the assets and liabilities of those subsidiaries to USD using the exchange rate in effect at the end of the period. We translate the revenues and expenses of those subsidiaries to USD using the average exchange rates in effect during the period. The net effect of these translation adjustments is included in “Foreign currency translation adjustments” in our consolidated statements of comprehensive income.

Cash and Cash Equivalents

Cash and Cash Equivalents: We control a number of bank accounts that are used exclusively to hold customer funds for the administration of customer benefits and have cash and cash equivalents on deposit to meet certain regulatory requirements. These amounts totaled $262 and $222 at March 31, 2019 and December 31, 2018, respectively and are included in the cash and cash equivalents line on our consolidated balance sheets.

Leases

Leases:We lease office space and certain computer and related equipment under noncancelable operating leases. We determine whether an arrangement is or contains a lease at its inception. We recognize lease liabilities based on the present value of the minimum lease payments not yet paid by using the lease term and discount rate determined at lease commencement. As our leases do not provide an implicit rate, we use our incremental secured borrowing rate commensurate with the underlying lease terms to determine the present value of our lease payments. Our leases may include options to extend or terminate a lease when it is reasonably certain that we will exercise that option. We recognize the operating right-of-use, or ROU, assets at an amount equal to the lease liability adjusted for prepaid or accrued rent, remaining balance of any lease incentives and unamortized initial direct costs.

The operating lease liabilities are reported in other current liabilities and other noncurrent liabilities and the related ROU assets are reported in other noncurrent assets on our consolidated balance sheet. Lease expense for our operating leases is calculated on a straight-line basis over the lease term and is reported in selling, general and administrative expense on our consolidated statements of income. For our office space leases, we account for the lease and non-lease components (such as common area maintenance) as a single lease component. We also do not recognize a lease liability or ROU asset for our office space leases whose lease terms, at commencement, are twelve months or less and that do not include a purchase option or option to extend that we are reasonably certain to exercise.

Revenue Recognition

Revenue Recognition: Premiums for fully-insured contracts are recognized as revenue over the period insurance coverage is provided, and, if applicable, net of amounts recognized for the minimum medical loss ratio rebates or contractual or government-mandated premium stabilization programs. Administrative fees and other revenues include revenue from certain group contracts that provide for the group to be at risk for all, or with supplemental insurance arrangements, a portion of their claims experience. We charge these self-funded groups an administrative fee, which is based on the number of members in a group or the group’s claim experience. Under our self-funded arrangements, revenue is recognized as administrative services are performed, and benefit payments under these programs are excluded from benefit expense. For additional information about our revenues, see Note 2, “Basis of Presentation and Significant Accounting Policies” and Note 19, “Segment Information,” to our audited consolidated financial statements as of and for the year ended December 31, 2018 included in our 2018 Annual Report on Form 10-K. In addition, see Note 15, “Segment Information,” herein for the disaggregation of revenues by segments and products.

For our non-fully-insured contracts, we had no material contract assets, contract liabilities or deferred contract costs recorded on our consolidated balance sheet at March 31, 2019. For the three months ended March 31, 2019, revenue recognized from performance obligations related to prior periods, such as due to changes in transaction price, was not material. For contracts that have an original expected duration of greater than one year, revenue expected to be recognized in future periods related to unfulfilled contractual performance obligations and contracts with variable consideration related to undelivered performance obligations is not material.

Recently Adopted Accounting Guidance

Recently Adopted Accounting Guidance: In March 2019, the Financial Accounting Standards Board, or FASB, issued Accounting Standards Update No. 2019-01, Leases (Topic 842): Codification Improvements. In July 2018, the FASB issued Accounting Standards Update No. 2018-11, Leases (Topic 842): Targeted Improvements and Accounting Standards Update No. 2018-10, Codification Improvements to Topic 842, Leases. These updates provide additional clarification, an optional transition method, a practical expedient and implementation guidance on the previously issued Accounting Standards Update No. 2016-02, Leases (Topic 842). Collectively, these updates supersede the lease guidance in Accounting Standards Codification, or ASC, Topic 840 and require lessees to recognize for all leases, with the exception of short-term leases, a lease liability, which is a lessee’s obligation to make lease payments arising from a lease, measured on a discounted basis. Concurrently, lessees are required to recognize an ROU asset, which is an asset that represents the lessee’s right to use, or control the use of, a specified asset for the lease term. We adopted this standard on January 1, 2019 by applying the optional transition method on the adoption date and did not adjust comparative periods. We also elected the package of practical expedients permitted, which among other things, allowed us to carry forward the lease classification for our existing leases. In preparation for the adoption of this standard and to enable preparation of the required financial information, we implemented a new lease accounting software solution as well as new internal controls. The adoption of this standard impacted our 2019 opening consolidated balance sheet as we recorded operating lease liabilities of $728 and ROU assets of $637, which equals the lease liabilities net of accrued rent, lease incentives and the carrying amount of ceased-use liabilities previously recorded on our balance sheet under the old guidance. We also recognized a cumulative-effect adjustment of $26 to our opening retained earnings for deferred gains on our previous sale-leaseback transactions. The adoption of this standard did not have an impact on our consolidated statements of income or cash flows.

In August 2018, the FASB issued Accounting Standards Update No. 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement, or ASU 2018-13. The amendments in ASU 2018-13 eliminate, add, and modify certain disclosure requirements for fair value measurements. The amendments are effective for interim and annual periods beginning after December 15, 2019, with early adoption permitted for either the entire ASU or only the provisions that eliminate or modify requirements. We early adopted the provisions that eliminate and modify disclosure requirements, on a retrospective basis, effective in our 2018 Annual Report on Form 10-K. We will adopt the new disclosure requirements, on a prospective basis, effective for our interim and annual reporting periods beginning after December 15, 2019.

In February 2018, the FASB issued Accounting Standards Update No. 2018-02, Income Statement—Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income, or ASU 2018-02. On December 22, 2017, the federal government enacted a tax bill, H.R.1, An act to provide for reconciliation pursuant to titles II and V of the concurrent resolution on the budget for fiscal year 2018, or the Tax Cuts and Jobs Act. The Tax Cuts and Jobs Act contains significant changes to corporate taxation, including, but not limited to, reducing the U.S. federal corporate income tax rate from 35% to 21% and modifying or limiting many business deductions. Current FASB guidance requires adjustments of deferred taxes due to a change in the federal corporate income tax rate to be included in income from operations. As a result, the tax effects of items within accumulated other comprehensive loss did not reflect the appropriate tax rate. The amendments in ASU 2018-02 allow a reclassification from accumulated other comprehensive loss to retained earnings for stranded tax effects resulting from the change in the federal corporate income tax rate. We adopted the amendments in ASU 2018-02 for our interim and annual reporting periods beginning on January 1, 2018 and reclassified $91 of stranded tax effects from accumulated other comprehensive loss to retained earnings on our consolidated balance sheet. The adoption of ASU 2018-02 did not have any impact on our results of operations or cash flows.

In May 2017, the FASB issued Accounting Standards Update No. 2017-09, Compensation - Stock Compensation (Topic 718): Scope of Modification Accounting, or ASU 2017-09. This update provides guidance about which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting in Topic 718. We adopted ASU 2017-09 on January 1, 2018. The guidance has been and will be applied prospectively to awards modified on or after the adoption date. The adoption of ASU 2017-09 did not have any impact on our consolidated financial position, results of operations or cash flows.

In March 2017, the FASB issued Accounting Standards Update No. 2017-08, Receivables - Nonrefundable Fees and Other Costs (Subtopic 310-20): Premium Amortization on Purchased Callable Debt Securities, or ASU 2017-08. This update changes the amortization period for certain purchased callable debt securities held at a premium by shortening the amortization period for the premium to the earliest call date. Under current guidance, the premium is generally amortized over the contractual life of the instrument. The amendments are to be applied on a modified retrospective basis through a cumulative-effect adjustment directly to retained earnings as of the beginning of the period of adoption. We adopted ASU 2017-08 on January 1, 2019, and the adoption of this standard did not have a material impact on our beginning retained earnings or on our consolidated financial position, results of operations or cash flows.

In March 2017, the FASB issued Accounting Standards Update No. 2017-07, Compensation - Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost, or ASU 2017-07. This amendment requires entities to disaggregate the service cost component from the other components of the benefit cost and present the service cost component in the same income statement line item as other employee compensation costs arising from services rendered by the pertinent employees during the period. The other components of net benefit cost are required to be presented in the income statement separately from the service cost component and outside a subtotal of income from operations. Certain of our defined benefit plans have previously been frozen, resulting in no annual service costs, and the remaining service costs for our non-frozen plan are not material. We adopted ASU 2017-07 on January 1, 2018, and it did not have a material impact on our results of operations, cash flows or consolidated financial position.

In December 2016, the FASB issued Accounting Standards Update No. 2016-20, Technical Corrections and Improvements to Topic 606, Revenue from Contracts with Customers. In May 2016, the FASB issued Accounting Standards Update No. 2016-12, Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients. In April 2016, the FASB issued Accounting Standards Update No. 2016-10, Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing. In March 2016, the FASB issued Accounting Standards Update No. 2016-08, Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross verses Net). These updates provide additional clarification and implementation guidance on the previously issued Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers (Topic 606). Collectively, these updates require a company to recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. These updates supersede almost all existing revenue recognition guidance under GAAP, with certain exceptions, including an exception for our premium revenues, which are recorded on the Premiums line item on our consolidated statements of income and will continue to be accounted for in accordance with the provisions of ASC Topic 944, Financial Services - Insurance. Our administrative service and other contracts that are subject to these Accounting Standards Updates are recorded in the Administrative fees and other revenue line item on our consolidated statements of income and represents approximately 6% of our consolidated total operating revenue. We adopted these standards on January 1, 2018 using the modified retrospective approach. The adoption of these standards did not have a material impact on our beginning retained earnings, results of operations, cash flows or consolidated financial position.

In November 2016, the FASB issued Accounting Standards Update No. 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash, or ASU 2016-18. This update amends ASC Topic 230, Statement of Cash Flow, to add and clarify guidance on the classification and presentation of restricted cash in the statement of cash flows. The guidance requires entities to show the changes in the total of cash, cash equivalents, restricted cash and restricted cash equivalents in the statement of cash flows. We adopted ASU 2016-18 on January 1, 2018 using a retrospective approach. The adoption of ASU 2016-18 did not have a material impact on our consolidated statements of cash flows and did not impact our results of operations or consolidated financial position.

In August 2016, the FASB issued Accounting Standards Update No. 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments, or ASU 2016-15. This update addresses the presentation and classification on the statement of cash flows for eight specific items, with the objective of reducing existing diversity in practice in how certain cash receipts and cash payments are presented and classified. We adopted ASU 2016-15 on January 1, 2018. The adoption of ASU 2016-15 did not have a material impact on our consolidated statements of cash flows, results of operations or consolidated financial position.

In January 2016, the FASB issued Accounting Standards Update No. 2016-01, Financial Instruments - Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities, or ASU 2016-01. The amendments in ASU 2016-01 change the accounting for non-consolidated equity investments that are not accounted for under the equity method of accounting by requiring changes in fair value to be recognized in income. Additionally, ASU 2016-01 simplifies the impairment assessment of equity investments without readily determinable fair values; requires entities to use the exit price when estimating the fair value of financial instruments; and modifies various presentation disclosure requirements for financial instruments. We adopted ASU 2016-01 on January 1, 2018 as a cumulative-effect adjustment and reclassified $320 of unrealized gains on equity investments, net of tax, from accumulated other comprehensive loss to retained earnings on our consolidated balance sheet. Effective January 1, 2018, our results of operations include the changes in fair value of these financial instruments.

Recent Accounting Guidance Not Yet Adopted

Recent Accounting Guidance Not Yet Adopted: In November 2018, the FASB issued Accounting Standards Update No. 2018-19, Codification Improvements to Topic 326, Financial Instruments - Credit Losses, or ASU 2018-19. The amendments in ASU 2018-19 provide additional clarification and implementation guidance on certain aspects of the previously issued Accounting Standards Update No. 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, or ASU 2016-13, and have the same effective date and transition requirements as ASU 2016-13. ASU 2016-13 introduces a current expected credit loss model for measuring expected credit losses for certain types of financial instruments held at the reporting date based on historical experience, current conditions and reasonable supportable forecasts. ASU 2016-13 replaces the current incurred loss model for measuring expected credit losses, requires expected losses on available-for-sale debt securities to be recognized through an allowance for credit losses rather than as reductions in the amortized cost of the securities and provides for additional disclosure requirements. ASU 2016-13 is effective for us on January 1, 2020, with early adoption permitted. We are currently evaluating the effects the adoption of ASU 2016-13 will have on our consolidated financial statements, results of operations and cash flows.

In August 2018, the FASB issued Accounting Standards Update No. 2018-15, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Customer's Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement that is a Service Contract, or ASU 2018-15. The amendments in ASU 2018-15 require implementation costs incurred by customers in cloud computing arrangements to be deferred and recognized over the term of the arrangement, if those costs would be capitalized by the customer in a software licensing arrangement under the internal-use software guidance. The amendments also require an entity to disclose the nature of its hosting arrangements and adhere to certain presentation requirements in its balance sheet, income statement and statement of cash flows. ASU 2018-15 is effective for us on January 1, 2020, with early adoption permitted. The guidance can be applied either prospectively to all implementation costs incurred after the date of adoption or retrospectively. We are currently evaluating the effects the adoption of ASU 2018-15 will have on our consolidated financial position, results of operations and cash flows.

In August 2018, the FASB issued Accounting Standards Update No. 2018-14, Compensation—Retirement Benefits - Defined Benefit Plans—General (Subtopic 715-20): Disclosure Framework—Changes to the Disclosure Requirements for Defined Benefit Plans, or ASU 2018-14. The amendments in ASU 2018-14 eliminate, add, and modify certain disclosure requirements for employers that sponsor defined benefit pension or other postretirement plans. The amendments are effective for our annual reporting periods beginning after December 15, 2020, with early adoption permitted. The guidance is to be applied on a retrospective basis to all periods presented. We are currently evaluating the effects the adoption of ASU 2018-14 will have on our disclosures.

In August 2018, the FASB issued Accounting Standards Update No. 2018-12, Financial Services—Insurance (Topic 944): Targeted Improvements to the Accounting for Long-Duration Contracts, or ASU 2018-12. The amendments in ASU 2018-12 make changes to a variety of areas to simplify or improve the existing recognition, measurement, presentation and disclosure requirements for long-duration contracts issued by an insurance entity. The amendments require insurers to annually review the assumptions they make about their policyholders and update the liabilities for future policy benefits if the assumptions change. The amendments also simplify the amortization of deferred contract acquisition costs and add new disclosure requirements about the assumptions insurers use to measure their liabilities and how they may affect future cash flows. The amendments in ASU 2018-12 will be effective for our interim and annual reporting periods beginning after December 15, 2020. The amendments related to the liability for future policy benefits for traditional and limited-payment contracts and deferred acquisition costs are to be applied to contracts in force as of the beginning of the earliest period presented, with an option to apply such amendments retrospectively with a cumulative-effect adjustment to the opening balance of retained earnings as of the earliest period presented. The amendments for market risk benefits are to be applied retrospectively. We are currently evaluating the effects the adoption of ASU 2018-12 will have on our consolidated financial position, results of operations, cash flows, and related disclosures.

In January 2017, the FASB issued Accounting Standards Update No. 2017-04, Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment, or ASU 2017-04. This update removes Step 2 of the goodwill impairment test under current guidance, which requires a hypothetical purchase price allocation. The new guidance requires an impairment charge to be recognized for the amount by which the carrying amount exceeds the reporting unit's fair value. Upon adoption, the guidance is to be applied prospectively. ASU 2017-04 is effective for us on January 1, 2020, with early adoption permitted. The adoption of ASU 2017-04 is not expected to have a material impact on our consolidated financial position, results of operations or cash flows.

There were no other new accounting pronouncements that were issued or became effective since the issuance of our 2018 Annual Report on Form 10-K that had, or are expected to have, a material impact on our consolidated financial position, results of operations or cash flows.

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Investments (Tables)

3 Months Ended

Mar. 31, 2019

Investment [Line Items]

Current and Long-Term Investments, Available-For-Sale

A summary of current and long-term fixed maturity securities, available-for-sale, at March 31, 2019 and December 31, 2018 is as follows:

													Non-Credit Component of OTTIs Recognized in Accumulated Other Comprehensive Loss
	Cost or Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses						Estimated Fair Value
					Less than 12 Months			12 Months or Greater
March 31, 2019
Fixed maturity securities:
United States Government securities	$	388	$	6	$	—		$	(1	)	$	393	$	—
Government sponsored securities	139		2		—			(1		)	140		—
States, municipalities and political subdivisions, tax-exempt	4,523		173		—			(3		)	4,693		—
Corporate securities	8,594		132		(24		)	(60		)	8,642		(3		)
Residential mortgage-backed securities	3,034		48		(1		)	(24		)	3,057		—
Commercial mortgage-backed securities	79		1		—			(1		)	79		—
Other securities	1,275		17		(3		)	(6		)	1,283		—
Total fixed maturity securities	$	18,032	$	379	$	(28	)	$	(96	)	$	18,287	$	(3	)
December 31, 2018
Fixed maturity securities:
United States Government securities	$	414	$	3	$	—		$	(1	)	$	416	$	—
Government sponsored securities	108		1		—			(1		)	108		—
States, municipalities and political subdivisions, tax-exempt	4,716		91		(3		)	(19		)	4,785		—
Corporate securities	8,189		33		(170		)	(115		)	7,937		(3		)
Residential mortgage-backed securities	2,769		31		(3		)	(47		)	2,750		—
Commercial mortgage-backed securities	69		—		—			(2		)	67		—
Other securities	1,115		14		(8		)	(5		)	1,116		—
Total fixed maturity securities	$	17,380	$	173	$	(184	)	$	(190	)	$	17,179	$	(3	)

Aggregate Fair Value and Gross Unrealized Loss of Fixed Maturity Securities in an Unrealized Loss Position

For fixed maturity securities in an unrealized loss position at March 31, 2019 and December 31, 2018, the following table summarizes the aggregate fair values and gross unrealized losses by length of time those securities have continuously been in an unrealized loss position:

	Less than 12 Months						12 Months or Greater
(Securities are whole amounts)	Number of Securities	Estimated Fair Value		Gross Unrealized Loss			Number of Securities	Estimated Fair Value		Gross Unrealized Loss
March 31, 2019
Fixed maturity securities:
United States Government securities	8	$	39	$	—		16	$	65	$	(1	)
Government sponsored securities	7	6		—			28	29		(1		)
States, municipalities and political subdivisions, tax-exempt	13	17		—			199	288		(3		)
Corporate securities	586	1,068		(24		)	1,295	2,273		(60		)
Residential mortgage-backed securities	87	157		(1		)	764	1,372		(24		)
Commercial mortgage-backed securities	—	—		—			12	23		(1		)
Other securities	125	413		(3		)	142	368		(6		)
Total fixed maturity securities	826	$	1,700	$	(28	)	2,456	$	4,418	$	(96	)
December 31, 2018
Fixed maturity securities:
United States Government securities	5	$	47	$	—		25	$	79	$	(1	)
Government sponsored securities	8	11		—			24	31		(1		)
States, municipalities and political subdivisions, tax-exempt	177	295		(3		)	604	1,032		(19		)
Corporate securities	2,185	4,503		(170		)	1,220	2,072		(115		)
Residential mortgage-backed securities	259	383		(3		)	816	1,458		(47		)
Commercial mortgage-backed securities	6	11		—			19	37		(2		)
Other securities	193	599		(8		)	93	237		(5		)
Total fixed maturity securities	2,833	$	5,849	$	(184	)	2,801	$	4,946	$	(190	)

Amortized Cost and Fair Value of Fixed Maturity Securities, By Contractual Maturity

The amortized cost and fair value of fixed maturity securities at March 31, 2019, by contractual maturity, are shown below. Expected maturities may differ from contractual maturities because the issuers of the securities may have the right to prepay obligations.

	Amortized Cost		Estimated Fair Value
Due in one year or less	$	541	$	542
Due after one year through five years	5,431		5,466
Due after five years through ten years	5,068		5,153
Due after ten years	3,879		3,990
Mortgage-backed securities	3,113		3,136
Total fixed maturity securities	$	18,032	$	18,287

Proceeds and Realized Gains and Losses from Investments

Proceeds from sales, maturities, calls or redemptions of fixed maturity securities and the related gross realized gains and gross realized losses for the three months ended March 31, 2019 and 2018 are as follows:

	Three Months Ended   March 31
	2019			2018
Proceeds	$	1,468		$	2,227
Gross realized gains	18			30
Gross realized losses	(17		)	(36		)

Investments In Equity Securities

A summary of current and long-term marketable equity securities at March 31, 2019 and December 31, 2018 is as follows:

	March 31, 2019		December 31, 2018
Equity securities:
Exchange traded funds	$	2	$	2
Fixed maturity mutual funds	589		557
Common equity securities	356		654
Private equity securities	297		313
Total	$	1,244	$	1,526

Gains (Losses) Related to Equity Securities

The gains and losses related to equity securities for the three months ended March 31, 2019 and 2018 are as follows:

	Three Months Ended   March 31
	2019			2018
Net realized gains (losses) recognized on equity securities	$	79		$	(43	)
Less: Net realized gains recognized on equity securities sold during the period	(21		)	(173		)
Unrealized gains (losses) recognized on equity securities still held at March 31, 2019	$	58		$	(216	)

Securities Lending Programs

The remaining contractual maturity of our securities lending agreements at March 31, 2019 is as follows:

	Overnight and Continuous
Securities lending transactions
United States Government securities	$	25
Corporate securities	545
Equity securities	20
Total	$	590

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Fair Value (Tables)

3 Months Ended

Mar. 31, 2019

Fair Value Disclosures [Abstract]

Fair Value Measurements By Level For Assets Measured At Fair Value On A Recurring Basis

A summary of fair value measurements by level for assets and liabilities measured at fair value on a recurring basis at March 31, 2019 and December 31, 2018 is as follows:

	Level I		Level II			Level III		Total
March 31, 2019
Assets:
Cash equivalents	$	2,551	$	—		$	—	$	2,551
Fixed maturity securities, available-for-sale:
United States Government securities	—		393			—		393
Government sponsored securities	—		140			—		140
States, municipalities and political subdivisions, tax-exempt	—		4,693			—		4,693
Corporate securities	—		8,345			297		8,642
Residential mortgage-backed securities	—		3,051			6		3,057
Commercial mortgage-backed securities	—		79			—		79
Other securities	—		1,269			14		1,283
Total fixed maturity securities, available-for-sale	—		17,970			317		18,287
Equity securities:
Exchange traded funds	2		—			—		2
Fixed maturity mutual funds	—		589			—		589
Common equity securities	315		41			—		356
Private equity securities	—		—			297		297
Total equity securities	317		630			297		1,244
Other invested assets, current	20		—			—		20
Securities lending collateral	—		591			—		591
Derivatives	—		15			—		15
Total assets	$	2,888	$	19,206		$	614	$	22,708
Liabilities:
Derivatives	$	—	$	(12	)	$	—	$	(12	)
Total liabilities	$	—	$	(12	)	$	—	$	(12	)
December 31, 2018
Assets:
Cash equivalents	$	1,815	$	—		$	—	$	1,815
Fixed maturity securities, available-for-sale:
United States Government securities	—		416			—		416
Government sponsored securities	—		108			—		108
States, municipalities and political subdivisions, tax-exempt	—		4,785			—		4,785
Corporate securities	2		7,648			287		7,937
Residential mortgage-backed securities	—		2,744			6		2,750
Commercial mortgage-backed securities	—		67			—		67
Other securities	—		1,099			17		1,116
Total fixed maturity securities, available-for-sale	2		16,867			310		17,179
Equity securities:
Exchange traded funds	2		—			—		2
Fixed maturity mutual funds	—		557			—		557
Common equity securities	601		53			—		654
Private equity securities	—		—			313		313
Total equity securities	603		610			313		1,526
Other invested assets, current	21		—			—		21
Securities lending collateral	314		290			—		604
Derivatives	—		16			—		16
Total assets	$	2,755	$	17,783		$	623	$	21,161
Liabilities:
Derivatives	$	—	$	(17	)	$	—	$	(17	)
Total liabilities	$	—	$	(17	)	$	—	$	(17	)

Reconciliation Of The Beginning And Ending Balances Of Assets Measured At Fair Value On A Recurring Basis Using Level III Inputs

A reconciliation of the beginning and ending balances of assets measured at fair value on a recurring basis using Level III inputs for the three months ended March 31, 2019 and 2018 is as follows:

	Corporate Securities			Residential Mortgage- backed Securities		Other  Securities			Equity Securities			Total
Three Months Ended March 31, 2019
Beginning balance at January 1, 2019	$	287		$	6	$	17		$	313		$	623
Total (losses) gains:
Recognized in net income	(1		)	—		—			(2		)	(3		)
Recognized in accumulated other comprehensive loss	2			—		—			—			2
Purchases	33			—		2			7			42
Sales	(1		)	—		—			(21		)	(22		)
Settlements	(21		)	—		(1		)	—			(22		)
Transfers into Level III	—			—		3			—			3
Transfers out of Level III	(2		)	—		(7		)	—			(9		)
Ending balance at March 31, 2019	$	297		$	6	$	14		$	297		$	614
Change in unrealized losses included in net income related to assets still held at March 31, 2019	$	—		$	—	$	—		$	(2	)	$	(2	)
Three Months Ended March 31, 2018
Beginning balance at January 1, 2018	$	229		$	5	$	16		$	287		$	537
Total losses recognized in net income	—			—		—			(239		)	(239		)
Purchases	20			—		—			256			276
Sales	(4		)	—		—			(1		)	(5		)
Settlements	(6		)	—		(1		)	—			(7		)
Transfers into Level III	21			—		—			—			21
Transfers out of Level III	—			—		(1		)	—			(1		)
Ending balance at March 31, 2018	$	260		$	5	$	14		$	303		$	582
Change in unrealized losses included in net income related to assets still held at March 31, 2018	$	(1	)	$	—	$	—		$	—		$	(1	)

Carrying And Fair Values By Level Of Financial Instruments Not Recorded At Fair Value On Consolidated Balance Sheet

A summary of the estimated fair values by level of each class of financial instrument that is recorded at its carrying value on our consolidated balance sheets at March 31, 2019 and December 31, 2018 is as follows:

	Carrying Value		Estimated Fair Value
			Level I		Level II		Level III		Total
March 31, 2019
Assets:
Other invested assets, long-term	$	3,710	$	—	$	—	$	3,710	$	3,710
Liabilities:
Debt:
Short-term borrowings	1,095		—		1,095		—		1,095
Commercial paper	875		—		875		—		875
Notes	17,191		—		17,752		—		17,752
Convertible debentures	181		—		1,071		—		1,071
December 31, 2018
Assets:
Other invested assets, long-term	$	3,726	$	—	$	—	$	3,726	$	3,726
Liabilities:
Debt:
Short-term borrowings	1,145		—		1,145		—		1,145
Commercial paper	697		—		697		—		697
Notes	17,178		—		17,145		—		17,145
Convertible debentures	191		—		1,030		—		1,030

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Retirement Benefits (Tables)

3 Months Ended

Mar. 31, 2019

Defined Benefit Plan [Abstract]

Components of Net Periodic (Benefit Credit) Benefit Cost

The components of net periodic benefit credit included in our consolidated statements of income for the three months ended March 31, 2019 and 2018 are as follows:

	Pension Benefits						Other Benefits
	Three Months Ended   March 31						Three Months Ended   March 31
	2019			2018			2019			2018
Service cost	$	—		$	2		$	—		$	—
Interest cost	16			14			4			4
Expected return on assets	(34		)	(37		)	(5		)	(6		)
Recognized actuarial loss	4			6			—			1
Settlement loss	2			6			—			—
Amortization of prior service credit	—			—			(3		)	(3		)
Net periodic benefit credit	$	(12	)	$	(9	)	$	(4	)	$	(4	)

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Medical Claims Payable (Tables)

3 Months Ended

Mar. 31, 2019

Liability for Claims and Claims Adjustment Expense [Abstract]

Reconciliation Of The Beginning And Ending Balances For Medical Claims Payable

A reconciliation of the beginning and ending balances for medical claims payable, by segment (see Note 15, “Segment Information”), for the three months ended March 31, 2019 is as follows:

	Commercial & Specialty Business			Government Business			Total
Gross medical claims payable, beginning of period	$	2,586		$	4,680		$	7,266
Ceded medical claims payable, beginning of period	(10		)	(24		)	(34		)
Net medical claims payable, beginning of period	2,576			4,656			7,232
Net incurred medical claims:
Current period	5,695			13,099			18,794
Prior periods redundancies	(197		)	(258		)	(455		)
Total net incurred medical claims	5,498			12,841			18,339
Net payments attributable to:
Current period medical claims	3,540			8,623			12,163
Prior periods medical claims	1,766			3,648			5,414
Total net payments	5,306			12,271			17,577
Net medical claims payable, end of period	2,768			5,226			7,994
Ceded medical claims payable, end of period	8			26			34
Gross medical claims payable, end of period	$	2,776		$	5,252		$	8,028

At March 31, 2019, the total of net incurred but not reported liabilities plus expected development on reported claims for the Commercial & Specialty Business was $87, $526 and $2,155 for the claim years 2017 and prior, 2018 and 2019, respectively.

At March 31, 2019, the total of net incurred but not reported liabilities plus expected development on reported claims for the Government Business was $51, $699 and $4,476 for the claim years 2017 and prior, 2018 and 2019, respectively.

A reconciliation of the beginning and ending balances for medical claims payable, by segment (see Note 15, “Segment Information”), for the three months ended March 31, 2018 is as follows:

	Commercial & Specialty Business			Government Business			Total
Gross medical claims payable, beginning of period	$	3,383		$	4,431		$	7,814
Ceded medical claims payable, beginning of period	(78		)	(27		)	(105		)
Net medical claims payable, beginning of period	3,305			4,404			7,709
Business combinations and purchase adjustments	—			199			199
Net incurred medical claims:
Current period	5,745			11,092			16,837
Prior periods redundancies	(335		)	(298		)	(633		)
Total net incurred medical claims	5,410			10,794			16,204
Net payments attributable to:
Current period medical claims	3,739			7,465			11,204
Prior periods medical claims	2,204			3,285			5,489
Total net payments	5,943			10,750			16,693
Net medical claims payable, end of period	2,772			4,647			7,419
Ceded medical claims payable, end of period	2			32			34
Gross medical claims payable, end of period	$	2,774		$	4,679		$	7,453

Reconciliation of Net Incurred Medical Claims to Benefit Expense

The reconciliation of net incurred medical claims to benefit expense included in our consolidated statements of income is as follows:

	Three Months Ended   March 31
	2019		2018
Net incurred medical claims:
Commercial & Specialty Business	$	5,498	$	5,410
Government Business	12,841		10,794
Total net incurred medical claims	18,339		16,204
Quality improvement and other claims expense	943		842
Benefit expense	$	19,282	$	17,046

Reconciliation of Short Duration Medical Claims Payable to the Consolidated Medical Claims Payable

The reconciliation of the medical claims payable reflected in the tables above, to the consolidated ending balance for medical claims payable included in the consolidated balance sheet, as of March 31, 2019, is as follows:

	Commercial & Specialty Business		Government Business		Total
Net medical claims payable, end of period	$	2,768	$	5,226	$	7,994
Ceded medical claims payable, end of period	8		26		34
Insurance lines other than short duration	—		214		214
Gross medical claims payable, end of period	$	2,776	$	5,466	$	8,242

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Debt (Tables)

3 Months Ended

Mar. 31, 2019

Debt Disclosure [Abstract]

Convertible Debenture Terms

The following table summarizes at March 31, 2019 the related balances, conversion rate and conversion price of the Debentures:

Outstanding principal amount	$	270
Unamortized debt discount	$	87
Net debt carrying amount	$	181
Equity component carrying amount	$	98
Conversion rate (shares of common stock per $1,000 of principal amount)	13.8707
Effective conversion price (per $1,000 of principal amount)	$	72.0939

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Capital Stock (Tables)

3 Months Ended

Mar. 31, 2019

Capital [Abstract]

Summary of Cash Dividend Activity

A summary of the cash dividend activity for the three months ended March 31, 2019 and 2018 is as follows:

Declaration Date	Record Date	Payment Date	Cash Dividend per Share	Total
Three Months Ended March 31, 2019
January 29, 2019	March 18, 2019	March 29, 2019	$0.80	$	206
Three Months Ended March 31, 2018
January 30, 2018	March 9, 2018	March 23, 2018	$0.75	$	192

Summary of Share Repurchases

A summary of common stock repurchases from April 1, 2019 through April 15, 2019 (subsequent to March 31, 2019) and for the three months ended March 31, 2019 and 2018 is as follows:

	April 1, 2019   Through   April 15, 2019		Three Months Ended March 31
			2019		2018
Shares repurchased	0.2		1.1		1.7
Average price per share	$	287.16	$	275.23	$	233.51
Aggregate cost	$	51	$	294	$	394
Authorization remaining at the end of the period	$	5,148	$	5,199	$	6,783

Summary of Stock Option Activity

A summary of stock option activity for the three months ended March 31, 2019 is as follows:

	Number of Shares		Weighted- Average Option Price per Share		Weighted- Average Remaining Contractual Life (Years)	Aggregate Intrinsic Value
Outstanding at January 1, 2019	3.7		$	149.65
Granted	0.7		307.66
Exercised	(0.5	)	121.08
Forfeited or expired	—		204.80
Outstanding at March 31, 2019	3.9		181.02		6.71	$	423
Exercisable at March 31, 2019	2.4		135.06		5.24	$	360

Summary of Nonvested Restricted Stock Activity Including Restricted Stock Units

A summary of the nonvested restricted stock activity, including restricted stock units, for the three months ended March 31, 2019 is as follows:

	Restricted Stock Shares and Units		Weighted- Average Grant Date Fair Value per Share
Nonvested at January 1, 2019	1.7		$	183.32
Granted	0.5		307.59
Vested	(0.7	)	150.13
Forfeited	—		212.54
Nonvested at March 31, 2019	1.5		239.40

Summary of Weighted-Average Assumptions Used to Estimate the Fair Value of Options Granted During the Periods

The following weighted-average assumptions were used to estimate the fair values of options granted during the three months ended March 31, 2019 and 2018:

	Three Months Ended March 31
	2019		2018
Risk-free interest rate	2.69	%	2.90	%
Volatility factor	25.00	%	30.00	%
Quarterly dividend yield	0.260	%	0.323	%
Weighted-average expected life (years)	4.40		3.70

Schedule of Weighted-Average Fair Values Determined for the Periods

The following weighted-average fair values per option or share were determined for the three months ended March 31, 2019 and 2018:

	Three Months Ended March 31
	2019		2018
Options granted during the period	$	68.92	$	55.31
Restricted stock awards granted during the period	307.59		232.15

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Accumulated Other Comprehensive Income (Tables)

3 Months Ended

Mar. 31, 2019

Comprehensive Income (Loss), Net of Tax, Attributable to Parent [Abstract]

Components Of Accumulated Other Comprehensive Loss

A reconciliation of the components of accumulated other comprehensive loss at March 31, 2019 and 2018 is as follows:

	March 31
	2019			2018
Investments, excluding non-credit component of other-than-temporary impairments:
Gross unrealized gains	$	379		$	239
Gross unrealized losses	(121		)	(220		)
Net pre-tax unrealized gains	258			19
Deferred tax liability	(61		)	(5		)
Net unrealized gains on investments	197			14
Non-credit components of other-than-temporary impairments on investments:
Unrealized losses	(3		)	—
Deferred tax asset	1			—
Net unrealized non-credit component of other-than-temporary impairments on investments	(2		)	—
Cash flow hedges:
Gross unrealized losses	(308		)	(322		)
Deferred tax asset	65			67
Net unrealized losses on cash flow hedges	(243		)	(255		)
Defined benefit pension plans:
Deferred net actuarial loss	(744		)	(612		)
Deferred prior service credits	(1		)	(1		)
Deferred tax asset	191			159
Net unrecognized periodic benefit costs for defined benefit pension plans	(554		)	(454		)
Postretirement benefit plans:
Deferred net actuarial loss	(57		)	(77		)
Deferred prior service costs	31			43
Deferred tax asset	7			9
Net unrecognized periodic benefit costs for postretirement benefit plans	(19		)	(25		)
Foreign currency translation adjustments:
Gross unrealized losses	(3		)	(2		)
Deferred tax asset	1			1
Net unrealized losses on foreign currency translation adjustments	(2		)	(1		)
Accumulated other comprehensive loss	$	(623	)	$	(721	)

Other Comprehensive Income (Loss) Reclassification Adjustments

Other comprehensive income (loss) reclassification adjustments for the three months ended March 31, 2019 and 2018 are as follows:

	Three Months Ended March 31
	2019		2018
Investments:
Net holding gain (loss) on investment securities arising during the period, net of tax (expense) benefit of $(98) and $77, respectively	$	350	$	(256	)
Reclassification adjustment for net realized loss on investment securities, net of tax benefit of $2 and $3, respectively	7		11
Total reclassification adjustment on investments	357		(245		)
Non-credit component of other-than-temporary impairments on investments:
Cash flow hedges:
Holding gain, net of tax expense of ($0) and ($8), respectively	3		29
Other:
Net change in unrecognized periodic benefit costs for defined benefit pension and postretirement benefit plans, net of tax expense of ($1) and ($3), respectively	3		7
Net gain (loss) recognized in other comprehensive income, net of tax (expense) benefit of ($101) and $63, respectively	$	363	$	(209	)

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Earnings Per Share (Tables)

3 Months Ended

Mar. 31, 2019

Earnings Per Share [Abstract]

Denominator for Basic and Diluted Earnings Per Share

The denominator for basic and diluted earnings per share for the three months ended March 31, 2019 and 2018 is as follows:

	Three Months Ended   March 31
	2019	2018
Denominator for basic earnings per share – weighted-average shares	257.1	255.8
Effect of dilutive securities – employee stock options, nonvested restricted stock awards, convertible debentures and equity units	5.2	7.0
Denominator for diluted earnings per share	262.3	262.8

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Segment Information (Tables)

3 Months Ended

Mar. 31, 2019

Segment Reporting [Abstract]

Financial Data By Reportable Segment

Financial data by reportable segment for the three months ended March 31, 2019 and 2018 is as follows:

	Commercial & Specialty Business		Government Business		Other			Total
Three Months Ended March 31, 2019
Operating revenue	$	9,392	$	14,993	$	3		$	24,388
Operating gain (loss)	1,587		383		(30		)	1,940
Three Months Ended March 31, 2018
Operating revenue	$	8,951	$	13,390	$	1		$	22,342
Operating gain (loss)	1,409		481		(22		)	1,868

Revenue from External Customers by Products and Services [Table Text Block]

The major product revenues for each of the reportable segments for the three months ended March 31, 2019 and 2018 are as follows:

	Three Months Ended   March 31
	2019		2018
Commercial & Specialty Business
Managed care products	$	7,618	$	7,278
Managed care services	1,366		1,278
Dental/Vision products and services	323		305
Other	85		90
Total Commercial & Specialty Business	9,392		8,951
Government Business
Managed care products	14,819		13,237
Managed care services	174		153
Total Government Business	14,993		13,390
Other
Other	3		1
Total product revenues	$	24,388	$	22,342

Reconciliation Of Reportable Segments Operating Revenues To Total Revenues Reported In The Consolidated Statements Of Income

A reconciliation of reportable segments’ operating revenue to the amounts of total revenues included in our consolidated statements of income for the three months ended March 31, 2019 and 2018 is as follows:

	Three Months Ended   March 31
	2019			2018
Reportable segments’ operating revenue	$	24,388		$	22,342
Net investment income	210			229
Net realized gains (losses) on financial instruments	78			(26		)
Other-than-temporary impairment losses recognized in income	(10		)	(8		)
Total revenues	$	24,666		$	22,537

Reconciliation Of Reportable Segments Operating Gain To Income Before Income Tax Expense Included In The Consolidated Statements Of Income

A reconciliation of reportable segments’ operating gain to income before income tax expense included in our consolidated statements of income for the three months ended March 31, 2019 and 2018 is as follows:

	Three Months Ended   March 31
	2019			2018
Reportable segments’ operating gain	$	1,940		$	1,868
Net investment income	210			229
Net realized gains (losses) on financial instruments	78			(26		)
Other-than-temporary impairment losses recognized in income	(10		)	(8		)
Interest expense	(187		)	(184		)
Amortization of other intangible assets	(87		)	(80		)
Gain (loss) on extinguishment of debt	1			(19		)
Income before income tax expense	$	1,945		$	1,780

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Leases (Tables)

3 Months Ended

Mar. 31, 2019

Leases [Abstract]

Lessee, Operating Lease, Disclosure [Table Text Block]

The information related to our leases is as follows:

	Balance Sheet Location	March 31, 2019
Operating Leases
Right-of-use assets	Other noncurrent assets	$	606
Lease liabilities, current	Other current liabilities	175
Lease liabilities, noncurrent	Other noncurrent liabilities	519

	Three Months Ended   March 31, 2019
Lease Expense
Operating lease expense	$	45
Short-term lease expense	12
Sublease income	(4		)
Total lease expense	$	53
Other information
Operating cash paid for amounts included in the measurement of lease liabilities, operating leases	$	44
Weighted average remaining lease term, operating leases	6.5 years
Weighted average discount rate, operating leases	3.97		%

Schedule of Future Minimum Rental Payments for Operating Leases [Table Text Block]

At March 31, 2019, future lease payments for noncancellable operating leases with initial or remaining terms of one year or more are as follows:

2019 (excluding the three months ended March 31, 2019)	$	134
2020	145
2021	116
2022	102
2023	84
Thereafter	240
Total future minimum payments	821
Less imputed interest	(127		)
Total lease liabilities	$	694

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Organization (Details) medical_member in Millions	Mar. 31, 2019 medical_member county states
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Number of Medical Members | medical_member	41
Number of counties in the Kansas City area the Company does not serve | county	30
Number of states in which the Company is licensed to conduct insurance operations | states	50

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Basis of Presentation and Signficant Accounting Policies Basis of Presentation and Significant Acconting Policies (Details) - USD ($) $ in Millions	3 Months Ended	12 Months Ended
	Mar. 31, 2019	Dec. 31, 2017	Jan. 01, 2019	Dec. 31, 2018	Jan. 01, 2018
Accounting Policies [Abstract]
Operating Lease Liabilities	$ 694		$ 728
Operating Lease, Right-of-Use Asset			637
Cumulative effect of new accounting principle in period of adoption			$ 26	$ 26	$ 320
Customer funds and cash and cash equivalents on deposit for regulatory requirements	$ 262			$ 222
Approximate percentage of revenues subject to new revenue guidance under ASC 606	6.00%
Adoption of ASU 2018-02		$ 91

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Business Acquisitions Business Acquisition (Assets Liabilities Acquired) (Details) members in Thousands, medical_member in Millions, $ in Millions	3 Months Ended
	Mar. 31, 2019 USD ($) medical_member	Dec. 31, 2018 USD ($)	Feb. 15, 2018 members counties
Business Acquisition [Line Items]
Number Of Medical Members | medical_member	41
Goodwill	$ 20,500	$ 20,504
America’s 1st Choice [Member]
Business Acquisition [Line Items]
Number Of Medical Members | members			135
America’s 1st Choice [Member] | FLORIDA
Business Acquisition [Line Items]
Number Of Counties In Which Entity Operates | counties			25
America’s 1st Choice [Member] | State of South Carolina [Member]
Business Acquisition [Line Items]
Number Of Counties In Which Entity Operates | counties			3
America’s 1st Choice [Member] | Government Business Segment [Member]
Business Acquisition [Line Items]
Goodwill	1,029
Business Acquisition, Goodwill, Expected Tax Deductible Amount	296
Other intangible assets	$ 711
Minimum [Member] | America’s 1st Choice [Member] | Government Business Segment [Member] | Customer relationships and provider networks
Business Acquisition [Line Items]
Intangible assets amortization period, years	9 years
Maximum [Member] | America’s 1st Choice [Member] | Government Business Segment [Member] | Customer relationships and provider networks
Business Acquisition [Line Items]
Intangible assets amortization period, years	13 years

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Investments (Current And Long-Term Fixed Maturity Securities, Available-For-Sale) (Details) - USD ($) $ in Millions	3 Months Ended	12 Months Ended
	Mar. 31, 2019	Dec. 31, 2018	Mar. 31, 2018
Investments [Line Items]
Gross Unrealized Gains	$ 379		$ 239
Fixed Maturities [Member]
Investments [Line Items]
Cost or Amortized Cost	18,032	$ 17,380
Gross Unrealized Gains	379	173
Gross Unrealized Losses, Less than 12 Months	(28)	(184)
Gross Unrealized Losses, 12 Months or Greater	(96)	(190)
Available-for-sale Securities	18,287	17,179
Non-Credit Component of Other-Than-Temporary Impairments Recognized in Accumulated Other Comprehensive Income	(3)	(3)
Fixed Maturities [Member] | United States Government Securities [Member]
Investments [Line Items]
Cost or Amortized Cost	388	414
Gross Unrealized Gains	6	3
Gross Unrealized Losses, Less than 12 Months	0	0
Gross Unrealized Losses, 12 Months or Greater	(1)	(1)
Available-for-sale Securities	393	416
Non-Credit Component of Other-Than-Temporary Impairments Recognized in Accumulated Other Comprehensive Income	0	0
Fixed Maturities [Member] | Government Sponsored Securities [Member]
Investments [Line Items]
Cost or Amortized Cost	139	108
Gross Unrealized Gains	2	1
Gross Unrealized Losses, Less than 12 Months	0	0
Gross Unrealized Losses, 12 Months or Greater	(1)	(1)
Available-for-sale Securities	140	108
Non-Credit Component of Other-Than-Temporary Impairments Recognized in Accumulated Other Comprehensive Income	0	0
Fixed Maturities [Member] | States, Municipalities And Political Subdivisions, Tax-Exempt [Member]
Investments [Line Items]
Cost or Amortized Cost	4,523	4,716
Gross Unrealized Gains	173	91
Gross Unrealized Losses, Less than 12 Months	0	(3)
Gross Unrealized Losses, 12 Months or Greater	(3)	(19)
Available-for-sale Securities	4,693	4,785
Non-Credit Component of Other-Than-Temporary Impairments Recognized in Accumulated Other Comprehensive Income	0	0
Fixed Maturities [Member] | Corporate Securities [Member]
Investments [Line Items]
Cost or Amortized Cost	8,594	8,189
Gross Unrealized Gains	132	33
Gross Unrealized Losses, Less than 12 Months	(24)	(170)
Gross Unrealized Losses, 12 Months or Greater	(60)	(115)
Available-for-sale Securities	8,642	7,937
Non-Credit Component of Other-Than-Temporary Impairments Recognized in Accumulated Other Comprehensive Income	(3)	(3)
Fixed Maturities [Member] | Residential Mortgage-Backed Securities [Member]
Investments [Line Items]
Cost or Amortized Cost	3,034	2,769
Gross Unrealized Gains	48	31
Gross Unrealized Losses, Less than 12 Months	(1)	(3)
Gross Unrealized Losses, 12 Months or Greater	(24)	(47)
Available-for-sale Securities	3,057	2,750
Non-Credit Component of Other-Than-Temporary Impairments Recognized in Accumulated Other Comprehensive Income	0	0
Fixed Maturities [Member] | Commercial Mortgage-Backed Securities [Member]
Investments [Line Items]
Cost or Amortized Cost	79	69
Gross Unrealized Gains	1	0
Gross Unrealized Losses, Less than 12 Months	0	0
Gross Unrealized Losses, 12 Months or Greater	(1)	(2)
Available-for-sale Securities	79	67
Non-Credit Component of Other-Than-Temporary Impairments Recognized in Accumulated Other Comprehensive Income	0	0
Fixed Maturities [Member] | Other Securities [Member]
Investments [Line Items]
Cost or Amortized Cost	1,275	1,115
Gross Unrealized Gains	17	14
Gross Unrealized Losses, Less than 12 Months	(3)	(8)
Gross Unrealized Losses, 12 Months or Greater	(6)	(5)
Available-for-sale Securities	1,283	1,116
Non-Credit Component of Other-Than-Temporary Impairments Recognized in Accumulated Other Comprehensive Income	$ 0	$ 0

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Investments (Aggregate Fair Value And Gross Unrealized Loss Of Fixed Maturity Securities In An Unrealized Loss Position) (Details) - Fixed Maturities [Member] $ in Millions	Mar. 31, 2019 USD ($) securities	Dec. 31, 2018 USD ($) securities
Schedule of Investments [Line Items]
Number of securities, less than 12 months | securities	826	2,833
Estimated fair value, less than 12 months	$ 1,700	$ 5,849
Gross unrealized loss, less than 12 months	$ (28)	$ (184)
Number of securities, 12 months or greater | securities	2,456	2,801
Estimated fair value, 12 months or greater	$ 4,418	$ 4,946
Gross unrealized loss, 12 months or greater	$ (96)	$ (190)
United States Government Securities [Member]
Schedule of Investments [Line Items]
Number of securities, less than 12 months | securities	8	5
Estimated fair value, less than 12 months	$ 39	$ 47
Gross unrealized loss, less than 12 months	$ 0	$ 0
Number of securities, 12 months or greater | securities	16	25
Estimated fair value, 12 months or greater	$ 65	$ 79
Gross unrealized loss, 12 months or greater	$ (1)	$ (1)
Government Sponsored Securities [Member]
Schedule of Investments [Line Items]
Number of securities, less than 12 months | securities	7	8
Estimated fair value, less than 12 months	$ 6	$ 11
Gross unrealized loss, less than 12 months	$ 0	$ 0
Number of securities, 12 months or greater | securities	28	24
Estimated fair value, 12 months or greater	$ 29	$ 31
Gross unrealized loss, 12 months or greater	$ (1)	$ (1)
States, Municipalities And Political Subdivisions, Tax-Exempt [Member]
Schedule of Investments [Line Items]
Number of securities, less than 12 months | securities	13	177
Estimated fair value, less than 12 months	$ 17	$ 295
Gross unrealized loss, less than 12 months	$ 0	$ (3)
Number of securities, 12 months or greater | securities	199	604
Estimated fair value, 12 months or greater	$ 288	$ 1,032
Gross unrealized loss, 12 months or greater	$ (3)	$ (19)
Corporate Securities [Member]
Schedule of Investments [Line Items]
Number of securities, less than 12 months | securities	586	2,185
Estimated fair value, less than 12 months	$ 1,068	$ 4,503
Gross unrealized loss, less than 12 months	$ (24)	$ (170)
Number of securities, 12 months or greater | securities	1,295	1,220
Estimated fair value, 12 months or greater	$ 2,273	$ 2,072
Gross unrealized loss, 12 months or greater	$ (60)	$ (115)
Residential Mortgage-Backed Securities [Member]
Schedule of Investments [Line Items]
Number of securities, less than 12 months | securities	87	259
Estimated fair value, less than 12 months	$ 157	$ 383
Gross unrealized loss, less than 12 months	$ (1)	$ (3)
Number of securities, 12 months or greater | securities	764	816
Estimated fair value, 12 months or greater	$ 1,372	$ 1,458
Gross unrealized loss, 12 months or greater	$ (24)	$ (47)
Commercial Mortgage-Backed Securities [Member]
Schedule of Investments [Line Items]
Number of securities, less than 12 months | securities	0	6
Estimated fair value, less than 12 months	$ 0	$ 11
Gross unrealized loss, less than 12 months	$ 0	$ 0
Number of securities, 12 months or greater | securities	12	19
Estimated fair value, 12 months or greater	$ 23	$ 37
Gross unrealized loss, 12 months or greater	$ (1)	$ (2)
Other Securities [Member]
Schedule of Investments [Line Items]
Number of securities, less than 12 months | securities	125	193
Estimated fair value, less than 12 months	$ 413	$ 599
Gross unrealized loss, less than 12 months	$ (3)	$ (8)
Number of securities, 12 months or greater | securities	142	93
Estimated fair value, 12 months or greater	$ 368	$ 237
Gross unrealized loss, 12 months or greater	$ (6)	$ (5)

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Investments (Amortized Cost And Fair Value Of Fixed Maturity Securities, By Contractual Maturity) (Details) - Fixed Maturities [Member] - USD ($) $ in Millions	Mar. 31, 2019	Dec. 31, 2018
Schedule of Investments [Line Items]
Due in one year or less, Amortized Cost	$ 541
Due after one year through five years, Amortized Cost	5,431
Due after five years through ten years, Amortized Cost	5,068
Due after ten years, Amortized Cost	3,879
Mortgage-backed securities, Amortized Cost	3,113
Available-for-sale securities, Amortized Cost	18,032	$ 17,380
Due in one year or less, Estimated Fair Value	542
Due after one year through five years, Estimated Fair Value	5,466
Due after five years through ten years, Estimated Fair Value	5,153
Due after ten years, Estimated Fair Value	3,990
Mortgage-backed securities, Estimated Fair Value	3,136
Available-for-sale securities, Estimated Fair Value	$ 18,287	$ 17,179

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Investments (Proceeds and Realized Gains Losses From Fixed Maturity Securities) (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Schedule of Available-for-sale Securities [Line Items]
Proceeds	$ 1,468	$ 2,227
Gross realized gains	18	30
Gross realized losses	$ (17)	$ (36)

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Investments (Current and Long-term Equity Securities) (Details) - USD ($) $ in Millions	Mar. 31, 2019	Dec. 31, 2018
Investment [Line Items]
Equity Securities	$ 1,244	$ 1,526
Exchange Traded Funds [Member]
Investment [Line Items]
Equity Securities	2	2
Fixed Maturity Mutual Funds [Member]
Investment [Line Items]
Equity Securities	589	557
Common Equity Securities [Member]
Investment [Line Items]
Equity Securities	356	654
Private Equity Securities [Member]
Investment [Line Items]
Equity Securities	$ 297	$ 313

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Investments (Gains and Losses Recognized on Equity Securities) (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Schedule of losses and gains related to equity securities [Line Items]
Net realized gains (losses) on financial instruments	$ 78	$ (26)
Equity Securities [Member]
Schedule of losses and gains related to equity securities [Line Items]
Net realized gains (losses) on financial instruments	79	(43)
Less: Net realized gains recognized on sale of equity securities during the period	(21)	(173)
Unrealized gains (losses) recognized on equity securities still held	$ 58	$ (216)

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Investments (Securities Lending Programs) (Details) - USD ($) $ in Millions	Mar. 31, 2019	Dec. 31, 2018
Transfer of Certain Financial Assets Accounted for as Secured Borrowings [Line Items]
Collateral received for securities loaned, at carrying value	$ 590	$ 604
Overnight and Continuous [Member]
Transfer of Certain Financial Assets Accounted for as Secured Borrowings [Line Items]
Collateral received for securities loaned, at carrying value	590
Overnight and Continuous [Member] | United States Government Securities [Member]
Transfer of Certain Financial Assets Accounted for as Secured Borrowings [Line Items]
Collateral received for securities loaned, at carrying value	25
Overnight and Continuous [Member] | Corporate Securities [Member]
Transfer of Certain Financial Assets Accounted for as Secured Borrowings [Line Items]
Collateral received for securities loaned, at carrying value	545
Overnight and Continuous [Member] | Equity Securities [Member]
Transfer of Certain Financial Assets Accounted for as Secured Borrowings [Line Items]
Collateral received for securities loaned, at carrying value	$ 20

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Investments (Narrative) (Details) - USD ($) $ in Millions	3 Months Ended	12 Months Ended
	Mar. 31, 2019	Dec. 31, 2018
Schedule of Investments [Line Items]
Fair value of collateral received at time of securities lending transactions	$ 590	$ 604
Securities Lending Transactions Ratio of Fair Value of Collateral Held To Securities On Loan	103.00%	102.00%
Securities lending transactions, initial collateral percentage value	102.00%

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Derivative Financial Instruments (Financial Statement Narrative) (Details) - USD ($) $ in Millions	Mar. 31, 2019	Dec. 31, 2018	Mar. 31, 2018
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Unrecognized loss for all outstanding and terminated cash flow hedges included in accumulated other comprehensive income	$ 243		$ 255
Cash Flow Hedging [Member]
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Unrecognized loss for all outstanding and terminated cash flow hedges included in accumulated other comprehensive income	$ (243)	$ (246)

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Fair Value (Fair Value Measurements By Level For Assets Measured At Fair Value On A Recurring Basis) (Details) - USD ($) $ in Millions	Mar. 31, 2019	Dec. 31, 2018
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash equivalents	$ 2,551	$ 1,815
Equity Securities	1,244	1,526
Other invested assets, current	20	21
Securities lending collateral	591	604
Total assets	22,708	21,161
Total liabilities	(12)	(17)
Exchange Traded Funds [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Equity Securities	2	2
Fixed Maturity Mutual Funds [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Equity Securities	589	557
Common Equity Securities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Equity Securities	356	654
Private Equity Securities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Equity Securities	297	313
Fixed Maturities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities	18,287	17,179
Fixed Maturities [Member] | United States Government Securities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities	393	416
Fixed Maturities [Member] | Government Sponsored Securities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities	140	108
Fixed Maturities [Member] | States, Municipalities And Political Subdivisions, Tax-Exempt [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities	4,693	4,785
Fixed Maturities [Member] | Corporate Securities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities	8,642	7,937
Fixed Maturities [Member] | Residential Mortgage-Backed Securities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities	3,057	2,750
Fixed Maturities [Member] | Commercial Mortgage-Backed Securities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities	79	67
Fixed Maturities [Member] | Other Securities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities	1,283	1,116
Equity Securities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Equity Securities	1,244	1,526
Equity Securities [Member] | Exchange Traded Funds [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Equity Securities	2	2
Equity Securities [Member] | Fixed Maturity Mutual Funds [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Equity Securities	589	557
Equity Securities [Member] | Common Equity Securities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Equity Securities	356	654
Equity Securities [Member] | Private Equity Securities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Equity Securities	297	313
Other Invested Assets, Current [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Other invested assets, current	20	21
Derivatives [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative assets	15	16
Derivative liabilities	(12)	(17)
Level I [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash equivalents	2,551	1,815
Securities lending collateral	0	314
Total assets	2,888	2,755
Total liabilities	0	0
Level I [Member] | Fixed Maturities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities	0	2
Level I [Member] | Fixed Maturities [Member] | United States Government Securities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities	0	0
Level I [Member] | Fixed Maturities [Member] | Government Sponsored Securities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities	0	0
Level I [Member] | Fixed Maturities [Member] | States, Municipalities And Political Subdivisions, Tax-Exempt [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities	0	0
Level I [Member] | Fixed Maturities [Member] | Corporate Securities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities	0	2
Level I [Member] | Fixed Maturities [Member] | Residential Mortgage-Backed Securities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities	0	0
Level I [Member] | Fixed Maturities [Member] | Commercial Mortgage-Backed Securities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities	0	0
Level I [Member] | Fixed Maturities [Member] | Other Securities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities	0	0
Level I [Member] | Equity Securities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Equity Securities	317	603
Level I [Member] | Equity Securities [Member] | Exchange Traded Funds [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Equity Securities	2	2
Level I [Member] | Equity Securities [Member] | Fixed Maturity Mutual Funds [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Equity Securities	0	0
Level I [Member] | Equity Securities [Member] | Common Equity Securities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Equity Securities	315	601
Level I [Member] | Equity Securities [Member] | Private Equity Securities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Equity Securities	0	0
Level I [Member] | Other Invested Assets, Current [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Other invested assets, current	20	21
Level I [Member] | Derivatives [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative assets	0	0
Derivative liabilities	0	0
Level II [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash equivalents	0	0
Securities lending collateral	591	290
Total assets	19,206	17,783
Total liabilities	(12)	(17)
Level II [Member] | Fixed Maturities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities	17,970	16,867
Level II [Member] | Fixed Maturities [Member] | United States Government Securities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities	393	416
Level II [Member] | Fixed Maturities [Member] | Government Sponsored Securities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities	140	108
Level II [Member] | Fixed Maturities [Member] | States, Municipalities And Political Subdivisions, Tax-Exempt [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities	4,693	4,785
Level II [Member] | Fixed Maturities [Member] | Corporate Securities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities	8,345	7,648
Level II [Member] | Fixed Maturities [Member] | Residential Mortgage-Backed Securities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities	3,051	2,744
Level II [Member] | Fixed Maturities [Member] | Commercial Mortgage-Backed Securities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities	79	67
Level II [Member] | Fixed Maturities [Member] | Other Securities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities	1,269	1,099
Level II [Member] | Equity Securities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Equity Securities	630	610
Level II [Member] | Equity Securities [Member] | Exchange Traded Funds [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Equity Securities	0	0
Level II [Member] | Equity Securities [Member] | Fixed Maturity Mutual Funds [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Equity Securities	589	557
Level II [Member] | Equity Securities [Member] | Common Equity Securities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Equity Securities	41	53
Level II [Member] | Equity Securities [Member] | Private Equity Securities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Equity Securities	0	0
Level II [Member] | Other Invested Assets, Current [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Other invested assets, current	0	0
Level II [Member] | Derivatives [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative assets	15	16
Derivative liabilities	(12)	(17)
Level III [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash equivalents	0	0
Securities lending collateral	0	0
Total assets	614	623
Total liabilities	0	0
Level III [Member] | Fixed Maturities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities	317	310
Level III [Member] | Fixed Maturities [Member] | United States Government Securities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities	0	0
Level III [Member] | Fixed Maturities [Member] | Government Sponsored Securities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities	0	0
Level III [Member] | Fixed Maturities [Member] | States, Municipalities And Political Subdivisions, Tax-Exempt [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities	0	0
Level III [Member] | Fixed Maturities [Member] | Corporate Securities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities	297	287
Level III [Member] | Fixed Maturities [Member] | Residential Mortgage-Backed Securities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities	6	6
Level III [Member] | Fixed Maturities [Member] | Commercial Mortgage-Backed Securities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities	0	0
Level III [Member] | Fixed Maturities [Member] | Other Securities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities	14	17
Level III [Member] | Equity Securities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Equity Securities	297	313
Level III [Member] | Equity Securities [Member] | Exchange Traded Funds [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Equity Securities	0	0
Level III [Member] | Equity Securities [Member] | Fixed Maturity Mutual Funds [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Equity Securities	0	0
Level III [Member] | Equity Securities [Member] | Common Equity Securities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Equity Securities	0	0
Level III [Member] | Equity Securities [Member] | Private Equity Securities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Equity Securities	297	313
Level III [Member] | Other Invested Assets, Current [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Other invested assets, current	0	0
Level III [Member] | Derivatives [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative assets	0	0
Derivative liabilities	$ 0	$ 0

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Fair Value (Reconciliation Of The Beginning And Ending Balances Of Assets Measured At Fair Value On A Recurring Basis Using Level III Inputs) (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Beginning balance	$ 623	$ 537
Total gains (losses) recognized in net income	(3)	(239)
Total gains (losses) recognized in accumulated other comprehensive loss	2
Purchases	42	276
Sales	(22)	(5)
Settlements	(22)	(7)
Transfers into Level III	3	21
Transfers out of Level III	(9)	(1)
Ending balance	614	582
Change in unrealized losses included in net income related to assets still held	(2)	(1)
Corporate Securities [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Beginning balance	287	229
Total gains (losses) recognized in net income	(1)	0
Total gains (losses) recognized in accumulated other comprehensive loss	2
Purchases	33	20
Sales	(1)	(4)
Settlements	(21)	(6)
Transfers into Level III	0	21
Transfers out of Level III	(2)	0
Ending balance	297	260
Change in unrealized losses included in net income related to assets still held	0	(1)
Residential Mortgage-Backed Securities [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Beginning balance	6	5
Total gains (losses) recognized in net income	0	0
Total gains (losses) recognized in accumulated other comprehensive loss	0
Purchases	0	0
Sales	0	0
Settlements	0	0
Transfers into Level III	0	0
Transfers out of Level III	0	0
Ending balance	6	5
Change in unrealized losses included in net income related to assets still held	0	0
Other Securities [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Beginning balance	17	16
Total gains (losses) recognized in net income	0	0
Total gains (losses) recognized in accumulated other comprehensive loss	0
Purchases	2	0
Sales	0	0
Settlements	(1)	(1)
Transfers into Level III	3	0
Transfers out of Level III	(7)	(1)
Ending balance	14	14
Change in unrealized losses included in net income related to assets still held	0	0
Equity Securities [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Beginning balance	313	287
Total gains (losses) recognized in net income	(2)	(239)
Total gains (losses) recognized in accumulated other comprehensive loss	0
Purchases	7	256
Sales	(21)	(1)
Settlements	0	0
Transfers into Level III	0	0
Transfers out of Level III	0	0
Ending balance	297	303
Change in unrealized losses included in net income related to assets still held	$ (2)	$ 0

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Fair Value (Carrying And Estimated Fair Values by Level Of Financial Instruments Not Recorded At Fair Value On Consolidated Balance Sheet) (Details) - USD ($) $ in Millions	Mar. 31, 2019	Dec. 31, 2018
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Other invested assets, long-term	$ 3,710	$ 3,726
Short-term borrowings	1,095	1,145
Carrying Value [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Other invested assets, long-term	3,710	3,726
Short-term borrowings	1,095	1,145
Commercial paper	875	697
Notes	17,191	17,178
Convertible debentures	181	191
Estimated Fair Value [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Other invested assets, long-term	3,710	3,726
Short-term borrowings	1,095	1,145
Commercial paper	875	697
Notes	17,752	17,145
Convertible debentures	1,071	1,030
Estimated Fair Value [Member] | Level III [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Other invested assets, long-term	3,710	3,726
Short-term borrowings	0	0
Commercial paper	0	0
Notes	0	0
Convertible debentures	0	0
Estimated Fair Value [Member] | Level II [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Other invested assets, long-term	0	0
Short-term borrowings	1,095	1,145
Commercial paper	875	697
Notes	17,752	17,145
Convertible debentures	1,071	1,030
Estimated Fair Value [Member] | Level I [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Other invested assets, long-term	0	0
Short-term borrowings	0	0
Commercial paper	0	0
Notes	0	0
Convertible debentures	$ 0	$ 0

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Income Taxes (Narrative) (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Income Tax Disclosure [Abstract]
Income tax expense	$ 394	$ 468
Effective tax rate	20.30%	26.30%
Health Insurance Provider Fee, nondeductible expense	$ (83)

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Retirement Benefits (Components Of Net Periodic (Benefit Credit) Benefit Cost) (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Pension Benefits [Member]
Defined Benefit Plan Disclosure [Line Items]
Service cost	$ 0	$ 2
Interest cost	16	14
Expected return on assets	(34)	(37)
Recognized actuarial loss	4	6
Settlement loss	2	6
Amortization of prior service cost (credit)	0	0
Net periodic benefit credit	(12)	(9)
Other Postretirement Benefits Plan [Member]
Defined Benefit Plan Disclosure [Line Items]
Service cost	0	0
Interest cost	4	4
Expected return on assets	(5)	(6)
Recognized actuarial loss	0	1
Settlement loss	0	0
Amortization of prior service cost (credit)	(3)	(3)
Net periodic benefit credit	$ (4)	$ (4)

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Medical Claims Payable (Reconciliation Of The Beginning And Ending Balances For Medical Claims Payable By Segment) (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Medical Claims Payable [Line Items]
Gross medical claims payable, beginning of period	$ 7,266	$ 7,814
Ceded medical claims payable, beginning of period	(34)	(105)
Net medical claims payable, beginning of period	7,232	7,709
Liability For Unpaid Claims And Claims Adjustment Expense Purchase Adjustments		199
Current period net incurred medical claims	18,794	16,837
Prior periods redundancies	(455)	(633)
Total net incurred medical claims	18,339	16,204
Net payments attributable to current period medical claims	12,163	11,204
Net payments attributable to prior periods medical claims	5,414	5,489
Total net payments	17,577	16,693
Short duration contract liability for unpaid claims and adjustment expense, Net	7,994	7,419
Ceded medical claims payable, end of period	34	34
Gross medical claims payable, end of period	8,028	7,453
Government Business Segment [Member]
Medical Claims Payable [Line Items]
Gross medical claims payable, beginning of period	4,680	4,431
Ceded medical claims payable, beginning of period	(24)	(27)
Net medical claims payable, beginning of period	4,656	4,404
Liability For Unpaid Claims And Claims Adjustment Expense Purchase Adjustments		199
Current period net incurred medical claims	13,099	11,092
Prior periods redundancies	(258)	(298)
Total net incurred medical claims	12,841	10,794
Net payments attributable to current period medical claims	8,623	7,465
Net payments attributable to prior periods medical claims	3,648	3,285
Total net payments	12,271	10,750
Short duration contract liability for unpaid claims and adjustment expense, Net	5,226	4,647
Ceded medical claims payable, end of period	26	32
Gross medical claims payable, end of period	5,252	4,679
Commercial Specialty Business Segment [Member]
Medical Claims Payable [Line Items]
Gross medical claims payable, beginning of period	2,586	3,383
Ceded medical claims payable, beginning of period	(10)	(78)
Net medical claims payable, beginning of period	2,576	3,305
Liability For Unpaid Claims And Claims Adjustment Expense Purchase Adjustments		0
Current period net incurred medical claims	5,695	5,745
Prior periods redundancies	(197)	(335)
Total net incurred medical claims	5,498	5,410
Net payments attributable to current period medical claims	3,540	3,739
Net payments attributable to prior periods medical claims	1,766	2,204
Total net payments	5,306	5,943
Short duration contract liability for unpaid claims and adjustment expense, Net	2,768	2,772
Ceded medical claims payable, end of period	8	2
Gross medical claims payable, end of period	$ 2,776	$ 2,774

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Medical Claims Payable (Reconciliation Of Net Incurred Medical Claims To Benefit Expense) (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Reconciliation of net incurred medical claims to benefit expense [Line Items]
Total net incurred medical claims	$ 18,339	$ 16,204
Quality improvement and other claims expense	943	842
Benefit expense	19,282	17,046
Government Business Segment [Member]
Reconciliation of net incurred medical claims to benefit expense [Line Items]
Total net incurred medical claims	12,841	10,794
Commercial Specialty Business Segment [Member]
Reconciliation of net incurred medical claims to benefit expense [Line Items]
Total net incurred medical claims	$ 5,498	$ 5,410

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Medical Claims Payable Medical Claims Payable (Reconciliation of the Claims Development to the Claims Liability) (Details) - USD ($) $ in Millions	Mar. 31, 2019	Dec. 31, 2018	Mar. 31, 2018	Dec. 31, 2017
Short-duration Insurance Contracts, Reconciliation of Claims Development to Liability [Line Items]
Net medical claims payable, end of period	$ 7,994	$ 7,232		$ 7,709
Ceded medical claims payable end of period	34	34	$ 34	105
Insurance lines other than short duration	214
Gross medical claims payable, end of period	8,242	7,454
Commercial Specialty Business Segment [Member]
Short-duration Insurance Contracts, Reconciliation of Claims Development to Liability [Line Items]
Net medical claims payable, end of period	2,768	2,576		3,305
Ceded medical claims payable end of period	8	10	2	78
Insurance lines other than short duration	0
Gross medical claims payable, end of period	2,776
Government Business Segment [Member]
Short-duration Insurance Contracts, Reconciliation of Claims Development to Liability [Line Items]
Net medical claims payable, end of period	5,226	4,656		4,404
Ceded medical claims payable end of period	26	$ 24	$ 32	$ 27
Insurance lines other than short duration	214
Gross medical claims payable, end of period	$ 5,466

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Medical Claims Payable (Narrative) (Details) $ in Millions	Mar. 31, 2019 USD ($)
Short-duration Insurance Contracts, Claim Year 2019 [Member] | Commercial Specialty Business Segment [Member]
Claims Development [Line Items]
Short-duration Insurance Contracts, Incurred but Not Reported (IBNR) Claims Liability, Net	$ 2,155
Short-duration Insurance Contracts, Claim Year 2019 [Member] | Government Business Segment [Member]
Claims Development [Line Items]
Short-duration Insurance Contracts, Incurred but Not Reported (IBNR) Claims Liability, Net	4,476
Short-duration Insurance Contracts, Claim Year 2018 [Member] | Commercial Specialty Business Segment [Member]
Claims Development [Line Items]
Short-duration Insurance Contracts, Incurred but Not Reported (IBNR) Claims Liability, Net	526
Short-duration Insurance Contracts, Claim Year 2018 [Member] | Government Business Segment [Member]
Claims Development [Line Items]
Short-duration Insurance Contracts, Incurred but Not Reported (IBNR) Claims Liability, Net	699
Short-duration Insurance Contracts, Claim Year 2017 and Prior [Member] | Commercial Specialty Business Segment [Member]
Claims Development [Line Items]
Short-duration Insurance Contracts, Incurred but Not Reported (IBNR) Claims Liability, Net	87
Short-duration Insurance Contracts, Claim Year 2017 and Prior [Member] | Government Business Segment [Member]
Claims Development [Line Items]
Short-duration Insurance Contracts, Incurred but Not Reported (IBNR) Claims Liability, Net	$ 51

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Debt (Convertible Debenture Details) (Details) - Convertible Debt [Member] $ / shares in Units, $ in Millions	3 Months Ended
	Mar. 31, 2019 USD ($) $ / shares
Debt Instrument [Line Items]
Outstanding principal amount	$ 270
Unamortized debt discount	87
Net debt carrying amount	181
Equity component carrying amount	$ 98
Conversion rate (shares of common stock per $1,000 of principal)	13.8707
Effective conversion price (per $1,000 of principal amount) per share | $ / shares	$ 72.0939

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Debt (Narrative) (Details) - USD ($) shares in Millions	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018	Dec. 31, 2018	Mar. 02, 2018	May 12, 2015
Debt Instrument [Line Items]
Gain (Loss) on extinguishment of debt	$ 1,000,000	$ (19,000,000)
Short-term borrowings	1,095,000,000		$ 1,145,000,000
Repayments of Long-term Debt	63,000,000	663,000,000
Equity Unit Purchase Agreements [Member]
Debt Instrument [Line Items]
Equity Units Issued					25.0
Equity Units, stated value per unit (whole dollars)					$ 50
Equity Units, ownership interest percentage in remarketable subordinated notes					5.00%
Debt instrument, face amount					$ 1,250,000,000
Senior Revolving Credit Facility [Member]
Debt Instrument [Line Items]
Maximum borrowing capacity	3,500,000,000
Convertible Debt [Member]
Debt Instrument [Line Items]
Repurchased Face Amount	17,000,000
Gain (Loss) on extinguishment of debt	1,000,000
Repayments of Long-term Debt	63,000,000
Lines of Credit [Member]
Debt Instrument [Line Items]
Maximum borrowing capacity	600,000,000
Short-term borrowings	400,000,000		500,000,000
Federal Home Loan Bank Advances [Member]
Debt Instrument [Line Items]
Federal Home Loan Bank, advances, short-term	$ 695,000,000		$ 645,000,000
Debt instrument interest rate	2.563%		2.458%
Surplus Notes [Member]
Debt Instrument [Line Items]
Long-term Debt	$ 25,000,000		$ 25,000,000
Remarketable Subordinated Notes [Member]
Debt Instrument [Line Items]
Remarketable subordinated notes tendered, cash payment		4,000,000
Remarketable Subordinated Notes [Member] | Four Point One Zero One Percent Due Two Thousand Twenty Eight [Member]
Debt Instrument [Line Items]
Debt instrument, face amount				$ 1,250,000,000
Remarketable Subordinated Notes [Member] | Four Point Five Five Zero Percent Due Two Thousand Forty Eight [Member]
Debt Instrument [Line Items]
Debt instrument, face amount				$ 850,000,000
Remarketable Subordinated Notes [Member] | One Point Nine Zero Zero Percent Due Two Thousand Twenty Eight [Member]
Debt Instrument [Line Items]
Debt instrument, face amount					$ 1,000
Debt Instrument, Interest Rate, Stated Percentage					1.90%
Remarketable Subordinated Notes [Member] | Remarketable Subordinated Notes [Member]
Debt Instrument [Line Items]
Gain (Loss) on extinguishment of debt		$ (19,000,000)
Senior Unsecured Notes [Member]
Debt Instrument [Line Items]
Long-term Debt	17,166,000,000		17,153,000,000
Commercial Paper Program
Debt Instrument [Line Items]
Commercial paper authorized	2,500,000,000
Commercial paper	$ 875,000,000		$ 697,000,000

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Commitments And Contingencies (Details) $ in Millions	3 Months Ended
	Mar. 31, 2019 USD ($)
Commitments And Contingencies [Line Items]
Gross premium tax rate, state of California	2.35%
Merger Agreement, Termination Fee	$ 1,850
Minimum [Member]
Commitments And Contingencies [Line Items]
Estimate of possible loss on loss contingencies	0
Maximum [Member]
Commitments And Contingencies [Line Items]
Estimate of possible loss on loss contingencies	250
Anthem, Inc. v. Express Scripts, Inc. [Member]
Commitments And Contingencies [Line Items]
Proceeds originally received at time of divestiture	4,675
Anthem, Inc. v. Express Scripts, Inc. [Member] | Damages for Pharmacy Pricing [Member]
Commitments And Contingencies [Line Items]
Approximate amount of damages sought for breaches	14,800
Anthem, Inc. v. Express Scripts, Inc. [Member] | Damages for Operational Breaches [Member]
Commitments And Contingencies [Line Items]
Approximate amount of damages sought for breaches	$ 158

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Capital Stock (Summary of Cash Dividend Activity) (Details) - USD ($) $ / shares in Units, $ in Millions	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Capital [Abstract]
Declaration date	Jan. 29, 2019	Jan. 30, 2018
Record date	Mar. 18, 2019	Mar. 09, 2018
Payment date	Mar. 29, 2019	Mar. 23, 2018
Cash dividends per share	$ 0.8	$ 0.75
Total payment	$ 206	$ 192

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Capital Stock (Summary of Share Repurchases) (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions	1 Months Ended	3 Months Ended
	Apr. 15, 2019	Mar. 31, 2019	Mar. 31, 2018
Equity, Class of Treasury Stock [Line Items]
Shares repurchased		1.1	1.7
Average price per share		$ 275.23	$ 233.51
Aggregate cost		$ 294	$ 394
Authorization remaining at the end of the period		$ 5,199	$ 6,783
Subsequent Event [Member]
Equity, Class of Treasury Stock [Line Items]
Shares repurchased	0.2
Average price per share	$ 287.16
Aggregate cost	$ 51
Authorization remaining at the end of the period	$ 5,148

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Capital Stock (Summary of Stock Option Activity) (Details) $ / shares in Units, shares in Millions, $ in Millions	3 Months Ended
	Mar. 31, 2019 USD ($) $ / shares shares
Number of Shares [Roll Forward]
Outstanding at beginning of period, Number of Shares | shares	3.7
Granted, Number of Shares | shares	0.7
Exercised, Number of Shares | shares	(0.5)
Forfeited or expired, Number of Shares | shares	0.0
Outstanding at end of period, Number of Shares | shares	3.9
Exercisable at end of period, Number of Shares | shares	2.4
Weighted-Average Option Price Per Share [Roll Forward]
Outstanding at beginning of period, Weighted-Average Option Price per Share | $ / shares	$ 149.65
Granted, Weighted-Average Option Price per Share | $ / shares	307.66
Exercised, Weighted-Average Option Price per Share | $ / shares	121.08
Forfeited or expired, Weighted-Average Option Price per Share | $ / shares	204.80
Outstanding at end of period, Weighted-Average Option Price per Share | $ / shares	181.02
Exercisable at end of period, Weighted-Average Option Price per Share | $ / shares	$ 135.06
Outstanding at end of period, Weighted-Average Remaining Contractual Life	6 years 8 months 16 days
Exercisable at end of period, Weighted-Average Remaining Contractual Life	5 years 2 months 28 days
Outstanding at end of period, Aggregate Intrinsic Value | $	$ 423
Exercisable at end of period, Aggregate Intrinsic Value | $	$ 360

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Capital Stock (Nonvested Restricted Stock Activity Including Restricted Stock Units) (Details) - $ / shares shares in Millions	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Restricted Stock Shares and Units [Roll Forward]
Nonvested at Beginning Balance, Restricted Stock Shares and Units	1.7
Granted, Restricted Stock Shares and Units	0.5	0.8
Vested, Restricted Stock Shares And Units	(0.7)
Forfeited, Restricted Stock Shares And Units	0.0
Nonvested at Ending Balance, Restricted Stock Shares and Units	1.5
Weighted-Average Grant Date Fair Value Per Share [Roll Forward]
Nonvested at Beginning Balance, Weighted-Average Grant Date Fair Value per Share	$ 183.32
Granted, Weighted-Average Grant Date Fair Value per Share	307.59	$ 232.15
Vested, Weighted-Average Grant Date Fair Value per Share	150.13
Forfeited, Weighted-Average Grant Date Fair Value per Share	212.54
Nonvested at Ending Balance, Weighted-Average Grant Date Fair Value per Share	$ 239.40

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Capital Stock (Fair Values of Options Granted During The Period Estimated Using Weighted-Average Assumptions) (Details)	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Capital [Abstract]
Risk-free interest rate	2.69%	2.90%
Volatility factor	25.00%	30.00%
Quarterly dividend yield	0.26%	0.323%
Weighted-average expected life (years)	4 years 4 months 24 days	3 years 8 months 12 days

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Capital Stock (Schedule Of Weighted-Average Fair Values Determined For The Periods) (Details) - $ / shares	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Capital [Abstract]
Options granted during the period	$ 68.92	$ 55.31
Restricted stock awards granted during the period	$ 307.59	$ 232.15

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Capital Stock (Narrative) (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions			3 Months Ended
	Jun. 25, 2019	Jun. 10, 2019	Mar. 31, 2019	Mar. 31, 2018	Dec. 07, 2017
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Dividends Payable, Date to be Paid			Mar. 29, 2019	Mar. 23, 2018
Dividends Payable, Date of Record			Mar. 18, 2019	Mar. 09, 2018
Increase In Stock Repurchase Program Authorization					$ 5,000
Subsequent Event [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Dividends Payable, Amount Per Share	$ 0.80
Dividends Payable, Date to be Paid	Jun. 25, 2019
Dividends Payable, Date of Record		Jun. 10, 2019
2019 to 2021 [Member] | Restricted Stock Units (RSUs) [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross			0.2

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Accumulated Other Comprehensive Loss (Reconciliation Of The Components Of Accumulated Other Comprehensive Income) (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018	Dec. 31, 2018
Available-for-sale Securities, Accumulated Gross Unrealized Gain, before Tax	$ 379	$ 239
Available-for-sale Securities, Accumulated Gross Unrealized Loss, before Tax	121	220
Investments, net pretax unrealized (losses) gains excluding non-credit component of other-than-temporary impairments	258	19
Deferred tax asset (liability)	(61)	(5)
Net unrealized (losses) gains on investments excluding non-credit component of other-than-temporary impairments	197	14
Non-credit component of other than temporary impairments on investments, unrealized losses	(3)	0
Non-credit component of other than temporary impairments on investments, deferred tax asset	1	0
Net unrealized non-credit component of other than temporary impairments on investments	(2)	0
Cash flow hedges, gross unrealized losses	(308)	(322)
Cash flow hedges, deferred tax asset	65	67
Net unrealized losses on cash flow hedges	(243)	(255)
Defined benefit pension plans, deferred net actuarial loss	(744)	(612)
Defined benefit pension plans, deferred prior service credits	(1)	(1)
Defined benefit pension plans, deferred tax asset	191	159
Net unrecognized periodic benefit costs for defined benefit pension plans	(554)	(454)
Postretirement benefit plans, deferred net actuarial loss	(57)	(77)
Postretirement beneft plans, prior service costs	31	43
Postretirement benefit plans, deferred tax asset	7	9
Net unrecognized periodic benefit costs for postretirement benefit plans	(19)	(25)
Foreign currency translation adjustments, gross unrealized losses	(3)	(2)
Foreign currency translation adjustments, deferred tax asset	1	1
Net unrealized losses on foreign currency translation adjustments	(2)	(1)
Accumulated other comprehensive loss	$ (623)	$ (721)	$ (986)

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Accumulated Other Comprehensive Income (Other Comprehensive Income (Loss) Reclassification Adjustments) (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Comprehensive Income (Loss), Net of Tax, Attributable to Parent [Abstract]
Net holding gain (loss) on investment securities arising during the period, net of tax	$ 350	$ (256)
Reclassification adjustment for net realized loss (gain) on investment securities, net of tax	7	11
Total reclassification adjustment on investments	357	(245)
Cash flow hedges, holding gain (loss), net of tax	3	29
Net change in unrecognized periodic benefit costs for defined benefit pension and postretirement benefit plans, net of tax	3	7
Net gain (loss) recognized in other comprehensive income, net of tax	$ 363	$ (209)

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Accumulated Other Comprehensive Income (Loss) Accumulated Other Comprehensive Income Reclassification Adjustments (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Accumulated Other Comprehensive Income (Loss) Reclassification Adjustments (Parantheticals) [Abstract]
Net holding gain (loss) on investment securities arising during the period, tax (expense) benefit	$ (98)	$ 77
Reclassification adjustment for net realized loss (gain) on investment securities, tax (benefit) expense	2	3
Cash flow hedges, holding gain (loss), tax (expense) benefit	0	(8)
Net change in unrecognized periodic benefit costs for defined benefit pension and postretirement benefit plans, tax expense	(1)	(3)
Net gain (loss) recognized in other comprehensive income, tax (expense) benefit	$ (101)	$ 63

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Earnings Per Share (Denominator For Basic And Diluted Earnings Per Share) (Details) - shares shares in Millions	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Earnings Per Share [Abstract]
Denominator for basic earnings per share - weighted-average shares	257.1	255.8
Effect of dilutive securities – employee stock options, nonvested restricted stock awards, convertible debentures and equity units	5.2	7.0
Denominator for diluted earnings per share	262.3	262.8

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Earnings Per Share (Narrative) (Details) - shares shares in Millions	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Earnings Per Share [Abstract]
Weighted average shares excluded from denominator for diluted earnings per share because the stock options were anti-dilutive	0.2	0.3
Restricted stock units issued under stock incentive plan	0.5	0.8
Restricted stock units excluded from the denominator for diluted earnings per share	0.2	0.3

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Segment Information (Financial Data By Reportable Segment) (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Segment Reporting Information [Line Items]
Reportable segments operating revenues	$ 24,388	$ 22,342
Operating gain (loss)	1,940	1,868
Commercial and Specialty Business [Member]
Segment Reporting Information [Line Items]
Reportable segments operating revenues	9,392	8,951
Operating gain (loss)	1,587	1,409
Government Business [Member]
Segment Reporting Information [Line Items]
Reportable segments operating revenues	14,993	13,390
Operating gain (loss)	383	481
Other [Member]
Segment Reporting Information [Line Items]
Reportable segments operating revenues	3	1
Operating gain (loss)	$ (30)	$ (22)

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Segment Information Segment Information (Major Product Revenues for Each Reportable Segment) (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Revenue from External Customer [Line Items]
Insurance Services Revenue	$ 24,388	$ 22,342
Other Segment [Member]
Revenue from External Customer [Line Items]
Insurance Services Revenue	3	1
Commercial Specialty Business Segment [Member]
Revenue from External Customer [Line Items]
Insurance Services Revenue	9,392	8,951
Government Business Segment [Member]
Revenue from External Customer [Line Items]
Insurance Services Revenue	14,993	13,390
Managed Care Products [Member] | Commercial Specialty Business Segment [Member]
Revenue from External Customer [Line Items]
Insurance Services Revenue	7,618	7,278
Managed Care Products [Member] | Government Business Segment [Member]
Revenue from External Customer [Line Items]
Insurance Services Revenue	14,819	13,237
Managed Care Services [Member] | Commercial Specialty Business Segment [Member]
Revenue from External Customer [Line Items]
Insurance Services Revenue	1,366	1,278
Managed Care Services [Member] | Government Business Segment [Member]
Revenue from External Customer [Line Items]
Insurance Services Revenue	174	153
Dental Vision Products And Services [Member] | Commercial Specialty Business Segment [Member]
Revenue from External Customer [Line Items]
Insurance Services Revenue	323	305
Other Products [Member] | Commercial Specialty Business Segment [Member]
Revenue from External Customer [Line Items]
Insurance Services Revenue	$ 85	$ 90

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Segment Information (Reconciliation Of Reportable Segments Operating Revenues To Total Revenues Reported In The Consolidated Statements Of Income) (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Segment Reporting [Abstract]
Reportable segments operating revenues	$ 24,388	$ 22,342
Net investment income	210	229
Net realized gains (losses) on financial instruments	78	(26)
Other-than-temporary impairment losses recognized in income	(10)	(8)
Total revenues	$ 24,666	$ 22,537

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Segment Information (Reconciliation Of Reportable Segments Operating Gain To Income Before Income Tax Expense Included In The Consolidated Statements Of Income) (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Segment Reporting [Abstract]
Reportable segments operating gain	$ 1,940	$ 1,868
Net investment income	210	229
Net realized gains (losses) on financial instruments	78	(26)
Other-than-temporary impairment losses recognized in income	(10)	(8)
Interest expense	(187)	(184)
Amortization of other intangible assets	(87)	(80)
Gain (loss) on Extinguishment of Debt	1	(19)
Income before income tax expense	$ 1,945	$ 1,780

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Segment Information Segment Information (Narrative) (Details)	3 Months Ended
	Mar. 31, 2019 segment
Segment Reporting, Disclosure of Entity's Reportable Segments [Abstract]
Number of Reportable Segments	3

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Leases (Lease and Other Information) (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2019	Jan. 01, 2019
Operating Lease, Right-of-Use Asset		$ 637
Operating Lease, Cost	$ 45
Short-term Lease, Cost	12
Sublease Income	(4)
Lease, Cost	53
Operating Lease, Payments	$ 44
Operating Lease, Weighted Average Remaining Lease Term	6 years 6 months
Weighted Average Discount Rate, Percent	3.97%
Other Noncurrent Assets [Member]
Operating Lease, Right-of-Use Asset	$ 606
Other Current Liabilities [Member]
Operating Lease, Liability, Current	175
Other Noncurrent Liabilities [Member]
Operating Lease, Liability, Noncurrent	$ 519

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Leases (Reconciliation of Future Lease Payments to Total Lease Liabilities) (Details) - USD ($) $ in Millions	Mar. 31, 2019	Jan. 01, 2019
Leases (Reconciliation of Future Lease Payments to Total Lease Liabilities) [Abstract]
Operating lease payments, 2019; excluding three months ended March 31, 2019	$ 134
Operating lease payments, 2020	145
Operating lease payments, 2021	116
Operating lease payments, 2022	102
Operating lease payments, 2023	84
Operating lease payments, Thereafter	240
Total future minimum payments	821
Imputed Interest, Leases	(127)
Operating Lease Liabilities	$ 694	$ 728

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Leases (Narrative) (Details) $ in Millions	3 Months Ended
	Mar. 31, 2019 USD ($)
Lessee, Lease, Description [Line Items]
Lessee, Operating Lease, Lease Not Yet Commenced Expense	$ 104
Lessee, Operating Lease, Lease Not yet Commenced, Term of Contract	12 years
Lessee, Operating Lease, Lease Not yet Commenced, Description	is expected to commence in 2020 when the construction is completed and we take possession of the building
Lessee, Operating Lease, Renewal Term	10 years
Minimum [Member]
Lessee, Lease, Description [Line Items]
Lessee, Operating Lease, Term of Contract	1 year
Maximum [Member]
Lessee, Lease, Description [Line Items]
Lessee, Operating Lease, Term of Contract	15 years