10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

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

For the Quarterly Period Ended September 30, 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 46204

(Address of principal executive offices) (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)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading symbol(s)	Name of each exchange on which registered
Common Stock, $0.01 par value	ANTM	New York Stock Exchange

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 ☒ 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  ☒    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	☒	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  ☒

As of October 16, 2019, 253,563,697 shares of the Registrant’s Common Stock were outstanding.

Anthem, Inc.

Quarterly Report on Form 10-Q

For the Period Ended September 30, 2019

Table of Contents

		Page
PART I. FINANCIAL INFORMATION
ITEM 1.	FINANCIAL STATEMENTS
	Consolidated Balance Sheets as of September 30, 2019 (Unaudited) and December 31, 2018	2
	Consolidated Statements of Income (Unaudited) for the Three and Nine Months Ended September 30, 2019 and 2018	3
	Consolidated Statements of Comprehensive Income (Unaudited) for the Three and Nine Months Ended September 30, 2019 and 2018	4
	Consolidated Statements of Cash Flows (Unaudited) for the Nine Months Ended September 30, 2019 and 2018	5
	Consolidated Statements of Shareholders’ Equity (Unaudited) for the Nine Months Ended September 30, 2019 and 2018	6
	Notes to Consolidated Financial Statements (Unaudited)	8
ITEM 2.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	41
ITEM 3.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	57
ITEM 4.	CONTROLS AND PROCEDURES	57
PART II. OTHER INFORMATION
ITEM 1.	LEGAL PROCEEDINGS	57
ITEM 1A.	RISK FACTORS	57
ITEM 2.	UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	58
ITEM 3.	DEFAULTS UPON SENIOR SECURITIES	58
ITEM 4.	MINE SAFETY DISCLOSURES	58
ITEM 5.	OTHER INFORMATION	58
ITEM 6.	EXHIBITS	59
SIGNATURES		60

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PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

Anthem, Inc.

Consolidated Balance Sheets

	September 30, 2019			December 31, 2018
(In millions, except share data)	(Unaudited)
Assets
Current assets:
Cash and cash equivalents	$	4,190		$	3,934
Fixed maturity securities, current (amortized cost of $19,267 and $16,894)	19,960			16,692
Equity securities, current	2,300			1,493
Other invested assets, current	10			21
Accrued investment income	168			162
Premium receivables	4,782			4,465
Self-funded receivables	2,555			2,278
Other receivables	2,870			2,558
Income taxes receivable	91			10
Securities lending collateral	465			604
Other current assets	2,113			2,104
Total current assets	39,504			34,321
Long-term investments:
Fixed maturity securities (amortized cost of $500 and $486)	518			487
Equity securities	29			33
Other invested assets	3,914			3,726
Property and equipment, net	2,921			2,735
Goodwill	20,500			20,504
Other intangible assets	8,756			9,007
Other noncurrent assets	1,667			758
Total assets	$	77,809		$	71,571
Liabilities and shareholders’ equity
Liabilities
Current liabilities:
Policy liabilities:
Medical claims payable	$	8,977		$	7,454
Reserves for future policy benefits	77			75
Other policyholder liabilities	2,503			2,590
Total policy liabilities	11,557			10,119
Unearned income	948			902
Accounts payable and accrued expenses	4,445			4,959
Security trades pending payable	542			197
Securities lending payable	465			604
Short-term borrowings	710			1,145
Current portion of long-term debt	700			849
Other current liabilities	3,867			3,190
Total current liabilities	23,234			21,965
Long-term debt, less current portion	18,820			17,217
Reserves for future policy benefits, noncurrent	661			706
Deferred tax liabilities, net	2,140			1,960
Other noncurrent liabilities	1,622			1,182
Total liabilities	46,477			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 – 253,780,229 and 257,395,577	3			3
Additional paid-in capital	9,524			9,536
Retained earnings	22,104			19,988
Accumulated other comprehensive loss	(299		)	(986		)
Total shareholders’ equity	31,332			28,541
Total liabilities and shareholders’ equity	$	77,809		$	71,571

See accompanying notes.

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Anthem, Inc.

Consolidated Statements of Income

(Unaudited) 

	Three Months Ended   September 30						Nine Months Ended   September 30
(In millions, except per share data)	2019			2018			2019			2018
Revenues
Premiums	$	23,793		$	21,451		$	70,137		$	63,602
Administrative fees and other revenue	2,651			1,529			5,872			4,435
Total operating revenue	26,444			22,980			76,009			68,037
Net investment income	242			250			737			708
Net realized gains on financial instruments	1			27			90			5
Other-than-temporary impairment losses on investments:
Total other-than-temporary impairment losses on investments	(14		)	(8		)	(36		)	(20		)
Portion of other-than-temporary impairment losses recognized in other comprehensive income	1			2			6			2
Other-than-temporary impairment losses recognized in income	(13		)	(6		)	(30		)	(18		)
Total revenues	26,674			23,251			76,806			68,732
Expenses
Benefit expense	20,753			18,185			60,403			52,959
Cost of products sold	745			—			843			—
Selling, general and administrative expense	3,418			3,546			9,862			10,402
Interest expense	185			188			556			564
Amortization of other intangible assets	84			91			256			265
(Gain) loss on extinguishment of debt	—			(1		)	(1		)	17
Total expenses	25,185			22,009			71,919			64,207
Income before income tax expense	1,489			1,242			4,887			4,525
Income tax expense	306			282			1,014			1,200
Net income	$	1,183		$	960		$	3,873		$	3,325
Net income per share
Basic	$	4.64		$	3.70		$	15.11		$	12.89
Diluted	$	4.55		$	3.62		$	14.83		$	12.58
Dividends per share	$	0.80		$	0.75		$	2.40		$	2.25

See accompanying notes.

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Anthem, Inc.

Consolidated Statements of Comprehensive Income

(Unaudited) 

	Three Months Ended   September 30						Nine Months Ended   September 30
(In millions)	2019			2018			2019			2018
Net income	$	1,183		$	960		$	3,873		$	3,325
Other comprehensive income (loss), net of tax:
Change in net unrealized gains/losses on investments	116			(36		)	711			(353		)
Change in non-credit component of other-than-temporary impairment losses on investments	(1		)	(2		)	(2		)	(2		)
Change in net unrealized losses on cash flow hedges	(34		)	2			(31		)	34
Change in net periodic pension and postretirement costs	4			7			10			22
Foreign currency translation adjustments	(1		)	—			(1		)	—
Other comprehensive income (loss)	84			(29		)	687			(299		)
Total comprehensive income	$	1,267		$	931		$	4,560		$	3,026

See accompanying notes.

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Anthem, Inc.

Consolidated Statements of Cash Flows

(Unaudited)

	Nine Months Ended   September 30
(In millions)	2019			2018
Operating activities
Net income	$	3,873		$	3,325
Adjustments to reconcile net income to net cash provided by operating activities:
Net realized gains on financial instruments	(90		)	(5		)
Other-than-temporary impairment losses recognized in income	30			18
(Gain) Loss on extinguishment of debt	(1		)	17
Loss on disposal of assets	1			2
Deferred income taxes	(29		)	141
Amortization, net of accretion	778			752
Depreciation expense	109			92
Share-based compensation	226			135
Changes in operating assets and liabilities:
Receivables, net	(880		)	(823		)
Other invested assets	(30		)	(17		)
Other assets	(280		)	(734		)
Policy liabilities	1,394			(556		)
Unearned income	46			(42		)
Accounts payable and accrued expenses	(931		)	756
Other liabilities	675			190
Income taxes	(81		)	273
Other, net	(76		)	(160		)
Net cash provided by operating activities	4,734			3,364
Investing activities
Purchases of fixed maturity securities	(7,616		)	(6,790		)
Proceeds from fixed maturity securities:
Sales	3,919			4,971
Maturities, calls and redemptions	1,583			1,442
Purchases of equity securities	(9,408		)	(812		)
Proceeds from sales of equity securities	8,671			2,119
Purchases of other invested assets	(286		)	(324		)
Proceeds from sales of other invested assets	242			251
Changes in securities lending collateral	139			(286		)
Purchases of subsidiaries, net of cash acquired	—			(1,732		)
Purchases of property and equipment	(726		)	(888		)
Other, net	(33		)	17
Net cash used in investing activities	(3,515		)	(2,032		)
Financing activities
Net repayments of commercial paper borrowings	(197		)	(54		)
Proceeds from long-term borrowings	2,473			835
Repayments of long-term borrowings	(923		)	(1,393		)
Proceeds from short-term borrowings	6,480			5,300
Repayments of short-term borrowings	(6,915		)	(5,305		)
Changes in securities lending payable	(139		)	287
Changes in bank overdrafts	250			97
Proceeds from issuance of common stock under Equity Units stock purchase contracts	—			1,250
Repurchase and retirement of common stock	(1,396		)	(1,192		)
Change in collateral and settlements of debt-related derivatives	(34		)	22
Cash dividends	(616		)	(583		)
Proceeds from issuance of common stock under employee stock plans	137			133
Taxes paid through withholding of common stock under employee stock plans	(82		)	(77		)
Net cash used in financing activities	(962		)	(680		)
Effect of foreign exchange rates on cash and cash equivalents	(1		)	(1		)
Change in cash and cash equivalents	256			651
Cash and cash equivalents at beginning of period	3,934			3,609
Cash and cash equivalents at end of period	$	4,190		$	4,260

See accompanying notes.

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Anthem, Inc.

Consolidated Statements of Shareholders’ Equity

(Unaudited)

	Nine Months Ended September 30, 2019
	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
Net income	—		—		—			1,139			—			1,139
Other comprehensive income	—		—		—			—			240			240
Repurchase and retirement of common stock	(1.7	)	—		(70		)	(388		)	—			(458		)
Dividends and dividend equivalents	—		—		—			(208		)	—			(208		)
Issuance of common stock under employee stock plans, net of related tax benefits	0.2		—		91			—			—			91
Convertible debenture repurchases and conversions	—		—		(9		)	—			—			(9		)
June 30, 2019	255.9		3		9,494			21,679			(383		)	30,793
Net income	—		—		—			1,183			—			1,183
Other comprehensive income	—		—		—			—			84			84
Repurchase and retirement of common stock	(2.4	)	—		(90		)	(554		)	—			(644		)
Dividends and dividend equivalents	—		—		—			(204		)	—			(204		)
Issuance of common stock under employee stock plans, net of related tax benefits	0.3		—		120			—			—			120
September 30, 2019	253.8		$	3	$	9,524		$	22,104		$	(299	)	$	31,332

See accompanying notes.

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Anthem, Inc.

Consolidated Statements of Shareholders’ Equity (continued)

(Unaudited)

	Nine Months Ended September 30, 2018
	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, 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
Net income	—		—		—			1,053			—			1,053
Other comprehensive loss	—		—		—			—			(61		)	(61		)
Issuance of common stock under Equity Units stock purchase contracts	6.0		—		1,250			—			—			1,250
Repurchase and retirement of common stock	(1.7	)	—		(60		)	(341		)	—			(401		)
Dividends and dividend equivalents	—		—		—			(197		)	—			(197		)
Issuance of common stock under employee stock plans, net of related tax benefits	0.3		—		69			—			—			69
June 30, 2018	260.1		3		9,748			19,756			(782		)	28,725
Net income	—		—		—			960			—			960
Other comprehensive loss	—		—		—			—			(29		)	(29		)
Repurchase and retirement of common stock	(1.6	)	—		(58		)	(339		)	—			(397		)
Dividends and dividend equivalents	—		—		—			(195		)	—			(195		)
Issuance of common stock under employee stock plans, net of related tax benefits	0.4		—		95			—			—			95
Convertible debenture repurchases and conversions	—		—		(65		)	—			—			(65		)
September 30, 2018	258.9		$	3	$	9,720		$	20,182		$	(811	)	$	29,094

See accompanying notes.

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Anthem, Inc.

Notes to Consolidated Financial Statements

(Unaudited)

September 30, 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 41 medical members through our affiliated health plans as of September 30, 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 plans; traditional indemnity plans and other hybrid plans, including Consumer-Driven Health Plans, 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 our Federal Health Products & Services business.

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 30 counties 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 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. Also, beginning in the second quarter of 2019, we provide pharmacy benefits management services through our IngenioRx subsidiary. 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. For additional information on prior year reclassifications, see Note 15, “Segment Information.” 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 and nine months ended September 30, 2019 and 2018 have been recorded. The results of operations for the three and nine months ended September 30, 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

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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 $242 and $222 at September 30, 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, any amounts probable of being owed under any residual value guarantees and discount rate determined at lease commencement. As our leases do not generally 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, the 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 as of September 30, 2019. 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. Beginning in the second quarter of 2019, administrative fees and other revenues also include unaffiliated revenue from services performed by IngenioRx. 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 September 30, 2019. For the three and nine months ended September 30, 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.

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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 consolidated 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 entirety of ASU 2018-13 or only the provisions that eliminate or modify disclosure 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 allowed 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 sheets. The adoption of ASU 2018-02 did not have any impact on our consolidated 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 ASC 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 the old guidance, the premium was 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

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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 consolidated results of operations, cash flows or 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 versus 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 represent 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, or on our consolidated results of operations, cash flows or 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 Flows, 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 consolidated results of operations or 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 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 sheets. 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 May 2019, the FASB issued Accounting Standards Update No. 2019-05, Financial Instruments - Credit Losses (Topic 326): Targeted Transition Relief, or ASU 2019-05. In April 2019, the FASB issued Accounting Standards Update No. 2019-04, Codification Improvements to Topic 326, Financial Instruments -

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Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments. In November 2018, the FASB issued Accounting Standards Update No. 2018-19, Codification Improvements to Topic 326, Financial Instruments - Credit Losses. These updates provide an option to irrevocably elect to measure certain individual financial assets at fair value instead of amortized cost and 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 requires a cumulative-effect adjustment to the statement of financial position to the opening balance of retained earnings at the date of adoption and a prospective transition approach for debt securities for which an other-than-temporary impairment had been recognized before the adoption date. The effect of a prospective transition approach is to maintain the same amortized cost basis before and after the date of adoption. ASU 2016-13 is effective for us on January 1, 2020, with early adoption permitted. We are currently gathering data and evaluating the effects the adoption of ASU 2016-13 will have on our consolidated financial statements.

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. While we are continuing to evaluate the effects the adoption of ASU 2018-15 will have on our consolidated financial position, results of operations and cash flows; we intend to apply the prospective method of adoption.

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.

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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.

3. Business Acquisitions

Pending Acquisition of Beacon

On June 6, 2019, we announced our entrance into an agreement to acquire Beacon Health Options, Inc., or Beacon, the largest independently held behavioral health organization in the country. Beacon serves approximately forty million individuals across all fifty states. This acquisition aligns with our strategy to diversify into health services and deliver both integrated solutions and care delivery models that personalize care for people with complex and chronic conditions. The acquisition is expected to close late in the fourth quarter of 2019 and is subject to standard closing conditions and customary approvals.

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. Upon the conclusion of our one-year measurement period, the excess of the consideration transferred over the fair value of the net assets acquired resulted in goodwill of $1,029, of which $333 was tax deductible. All of the goodwill was allocated to our Government Business segment. 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.

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 and nine months ended September 30, 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 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 September 30, 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
September 30, 2019
Fixed maturity securities:
United States Government securities	$	487	$	10	$	—		$	—		$	497	$	—
Government sponsored securities	125		6		—			—			131		—
States, municipalities and political subdivisions	4,469		275		(1		)	(1		)	4,742		—
Corporate securities	9,040		341		(17		)	(25		)	9,339		(5		)
Residential mortgage-backed securities	3,914		111		(4		)	(4		)	4,017		—
Commercial mortgage-backed securities	87		3		—			—			90		—
Other securities	1,645		24		(2		)	(5		)	1,662		—
Total fixed maturity securities	$	19,767	$	770	$	(24	)	$	(35	)	$	20,478	$	(5	)
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	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 September 30, 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
September 30, 2019
Fixed maturity securities:
United States Government securities	8	$	49	$	—		5	$	14	$	—
Government sponsored securities	6	5		—			3	1		—
States, municipalities and political subdivisions	66	108		(1		)	16	13		(1		)
Corporate securities	455	711		(17		)	338	509		(25		)
Residential mortgage-backed securities	228	422		(4		)	215	323		(4		)
Commercial mortgage-backed securities	1	3		—			4	8		—
Other securities	190	483		(2		)	107	332		(5		)
Total fixed maturity securities	954	$	1,781	$	(24	)	688	$	1,200	$	(35	)
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	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 September 30, 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	$	628	$	628
Due after one year through five years	5,569		5,701
Due after five years through ten years	5,504		5,731
Due after ten years	4,065		4,311
Mortgage-backed securities	4,001		4,107
Total fixed maturity securities	$	19,767	$	20,478

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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 and nine months ended September 30, 2019 and 2018 are as follows:

	Three Months Ended   September 30						Nine Months Ended   September 30
	2019			2018			2019			2018
Proceeds	$	2,048		$	1,532		$	5,502		$	6,413
Gross realized gains	26			12			66			73
Gross realized losses	(9		)	(16		)	(43		)	(85		)

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 September 30, 2019 and December 31, 2018 is as follows:

	September 30, 2019		December 31, 2018
Equity securities:
Exchange traded funds	$	563	$	2
Fixed maturity mutual funds	631		557
Common equity securities	829		654
Private equity securities	306		313
Total	$	2,329	$	1,526

The gains and losses related to equity securities for the three and nine months ended September 30, 2019 and 2018 are as follows:

	Three Months Ended September 30						Nine Months Ended September 30
	2019			2018			2019			2018
Net realized (losses) gains recognized on equity securities	$	(16	)	$	27		$	75		$	(33	)
Less: Net realized gains recognized on equity securities sold during the period	(6		)	(11		)	(55		)	(208		)
Unrealized (losses) gains recognized on equity securities still held at September 30	$	(22	)	$	16		$	20		$	(241	)

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 $465 and $604 at September 30, 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 September 30, 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 September 30, 2019 is as follows:

	Overnight and Continuous
Securities lending transactions
United States Government securities	$	132
Corporate securities	324
Equity securities	9
Total	$	465

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.

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 Offered Rate.

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 $277 and $246 at September 30, 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.

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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 with quoted market prices are designated as Level I. 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.

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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 September 30, 2019 and December 31, 2018 is as follows:

	Level I		Level II			Level III		Total
September 30, 2019
Assets:
Cash equivalents	$	1,258	$	—		$	—	$	1,258
Fixed maturity securities, available-for-sale:
United States Government securities	—		497			—		497
Government sponsored securities	—		131			—		131
States, municipalities and political subdivisions	—		4,742			—		4,742
Corporate securities	—		9,028			311		9,339
Residential mortgage-backed securities	—		4,014			3		4,017
Commercial mortgage-backed securities	—		90			—		90
Other securities	—		1,651			11		1,662
Total fixed maturity securities, available-for-sale	—		20,153			325		20,478
Equity securities:
Exchange traded funds	563		—			—		563
Fixed maturity mutual funds	—		631			—		631
Common equity securities	796		33			—		829
Private equity securities	—		—			306		306
Total equity securities	1,359		664			306		2,329
Other invested assets, current	10		—			—		10
Securities lending collateral	—		465			—		465
Derivatives	—		25			—		25
Total assets	$	2,627	$	21,307		$	631	$	24,565
Liabilities:
Derivatives	$	—	$	(1	)	$	—	$	(1	)
Total liabilities	$	—	$	(1	)	$	—	$	(1	)
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	—		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	)

-19-

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 September 30, 2019 and 2018 is as follows:

	Corporate Securities			Residential Mortgage- backed Securities		Other  Securities			Equity Securities			Total
Three Months Ended September 30, 2019
Beginning balance at July 1, 2019	$	297		$	3	$	11		$	305		$	616
Total gains (losses):
Recognized in net income	(3		)	—		—			(5		)	(8		)
Recognized in accumulated other comprehensive loss	12			—		—			—			12
Purchases	28			—		—			25			53
Sales	(9		)	—		—			(19		)	(28		)
Settlements	(18		)	—		—			—			(18		)
Transfers into Level III	4			—		—			—			4
Transfers out of Level III	—			—		—			—			—
Ending balance at September 30, 2019	$	311		$	3	$	11		$	306		$	631
Change in unrealized losses included in net income related to assets still held at September 30, 2019	$	—		$	—	$	—		$	(4	)	$	(4	)
Three Months Ended September 30, 2018
Beginning balance at July 1, 2018	$	304		$	4	$	26		$	312		$	646
Total gains (losses):
Recognized in net income	—			—		—			4			4
Recognized in accumulated other comprehensive loss	(1		)	—		—			—			(1		)
Purchases	32			—		3			5			40
Sales	(2		)	—		—			(3		)	(5		)
Settlements	(30		)	—		—			—			(30		)
Transfers into Level III	6			—		1			—			7
Transfers out of Level III	(2		)	—		(13		)	—			(15		)
Ending balance at September 30, 2018	$	307		$	4	$	17		$	318		$	646
Change in unrealized gains included in net income related to assets still held at September 30, 2018	$	—		$	—	$	—		$	9		$	9

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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 nine months ended September 30, 2019 and 2018 is as follows:

	Corporate Securities			Residential Mortgage- backed Securities			Other  Securities			Equity Securities			Total
Nine Months Ended September 30, 2019
Beginning balance at January 1, 2019	$	287		$	6		$	17		$	313		$	623
Total (losses) gains:
Recognized in net income	(7		)	—			—			(5		)	(12		)
Recognized in accumulated other comprehensive loss	14			—			—			—			14
Purchases	91			—			2			46			139
Sales	(11		)	—			—			(48		)	(59		)
Settlements	(58		)	(1		)	(2		)	—			(61		)
Transfers into Level III	4			—			3			—			7
Transfers out of Level III	(9		)	(2		)	(9		)	—			(20		)
Ending balance at September 30, 2019	$	311		$	3		$	11		$	306		$	631
Change in unrealized losses included in net income related to assets still held at September 30, 2019	$	—		$	—		$	—		$	(4	)	$	(4	)
Nine Months Ended September 30, 2018
Beginning balance at January 1, 2018	$	229		$	5		$	16		$	287		$	537
Total (losses) gains:
Recognized in net income	1			—			—			(228		)	(227		)
Recognized in accumulated other comprehensive loss	(3		)	—			—			—			(3		)
Purchases	94			—			12			263			369
Sales	(17		)	—			—			(4		)	(21		)
Settlements	(60		)	(1		)	(1		)	—			(62		)
Transfers into Level III	65			—			5			—			70
Transfers out of Level III	(2		)	—			(15		)	—			(17		)
Ending balance at September 30, 2018	$	307		$	4		$	17		$	318		$	646
Change in unrealized gains included in net income related to assets still held at September 30, 2018	$	—		$	—		$	—		$	27		$	27

There were no individually material transfers into or out of Level III during the three and nine months ended September 30, 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 and nine months ended September 30, 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 and nine months ended September 30, 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 and cash equivalents, 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.

-22-

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 September 30, 2019 and December 31, 2018 is as follows:

	Carrying Value		Estimated Fair Value
			Level I		Level II		Level III		Total
September 30, 2019
Assets:
Other invested assets, long-term	$	3,914	$	—	$	—	$	3,914	$	3,914
Liabilities:
Debt:
Short-term borrowings	710		—		710		—		710
Commercial paper	500		—		500		—		500
Notes	18,841		—		20,198		—		20,198
Convertible debentures	179		—		893		—		893
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 September 30, 2019 and 2018, we recognized income tax expense of $306 and $282, respectively, which represent effective tax rates of 20.6% and 22.7%, respectively. The increase in income tax expense was primarily due to the 2018 remeasurement of deferred tax assets and liabilities against the prior year provisional estimates as required by the Tax Cuts and Jobs Act. The increase in income tax expense was partially offset by the suspension of the non-tax deductible Health Insurance Provider Fee, or HIP Fee, for 2019, which resulted in a decrease in income tax expense of $76. The decrease in the effective tax rate was primarily due to the suspension of the non-tax deductible HIP Fee for 2019.

During the nine months ended September 30, 2019 and 2018, we recognized income tax expense of $1,014 and $1,200, respectively, which represent effective tax rates of 20.7% and 26.5%, respectively. The decrease in income tax expense and effective tax rate was primarily due to the suspension of the non-tax deductible HIP Fee for 2019, which resulted in a decrease in income tax expense of $243.

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8. Retirement Benefits

The components of net periodic benefit credit included in our consolidated statements of income for the three months ended September 30, 2019 and 2018 are as follows:

	Pension Benefits						Other Benefits
	Three Months Ended   September 30						Three Months Ended   September 30
	2019			2018			2019			2018
Service cost	$	—		$	2		$	1		$	—
Interest cost	15			14			3			4
Expected return on assets	(35		)	(37		)	(6		)	(6		)
Recognized actuarial loss	5			6			1			1
Settlement loss	4			6			—			—
Amortization of prior service credit	—			—			(3		)	(3		)
Net periodic benefit credit	$	(11	)	$	(9	)	$	(4	)	$	(4	)

The components of net periodic benefit credit included in our consolidated statements of income for the nine months ended September 30, 2019 and 2018 are as follows:

	Pension Benefits						Other Benefits
	Nine Months Ended   September 30						Nine Months Ended   September 30
	2019			2018			2019			2018
Service cost	$	—		$	6		$	1		$	1
Interest cost	47			41			11			11
Expected return on assets	(104		)	(110		)	(17		)	(18		)
Recognized actuarial loss	13			18			2			3
Settlement loss	8			19			—			—
Amortization of prior service credit	—			—			(9		)	(9		)
Net periodic benefit credit	$	(36	)	$	(26	)	$	(12	)	$	(12	)

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. Contributions of $0 and $7 were made to our retirement benefit plans during the nine months ended September 30, 2019 and 2018.

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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 nine months ended September 30, 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	18,986			39,171			58,157
Prior periods redundancies	(162		)	(275		)	(437		)
Total net incurred medical claims	18,824			38,896			57,720
Net payments attributable to:
Current period medical claims	16,277			33,474			49,751
Prior periods medical claims	2,213			4,253			6,466
Total net payments	18,490			37,727			56,217
Net medical claims payable, end of period	2,910			5,825			8,735
Ceded medical claims payable, end of period	8			27			35
Gross medical claims payable, end of period	$	2,918		$	5,852		$	8,770

At September 30, 2019, the total of net incurred but not reported liabilities plus expected development on reported claims for the Commercial & Specialty Business was $30, $171 and $2,709 for the claim years 2017 and prior, 2018 and 2019, respectively.

At September 30, 2019, the total of net incurred but not reported liabilities plus expected development on reported claims for the Government Business was $23, $105 and $5,697 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 nine months ended September 30, 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	17,732			33,664			51,396
Prior periods redundancies	(424		)	(434		)	(858		)
Total net incurred medical claims	17,308			33,230			50,538
Net payments attributable to:
Current period medical claims	15,275			29,236			44,511
Prior periods medical claims	2,671			3,833			6,504
Total net payments	17,946			33,069			51,015
Net medical claims payable, end of period	2,667			4,764			7,431
Ceded medical claims payable, end of period	10			27			37
Gross medical claims payable, end of period	$	2,677		$	4,791		$	7,468

The reconciliation of net incurred medical claims to benefit expense included in our consolidated statements of income for periods in 2019 are as follows:

	Three Months Ended						Nine Months Ended   September 30, 2019
	March 31, 2019		June 30, 2019		September 30, 2019
Net incurred medical claims:
Commercial & Specialty Business	$	5,856	$	6,422	$	6,546	$	18,824
Government Business	12,483		13,062		13,351		38,896
Total net incurred medical claims	18,339		19,484		19,897		57,720
Quality improvement and other claims expense	943		884		856		2,683
Benefit expense	$	19,282	$	20,368	$	20,753	$	60,403

Net incurred medical claims for the three months ended March 31, 2019 and June 30, 2019 in the table above include a reclassification between the Commercial and Specialty Business and Government Business segments to adjust certain intercompany eliminations. This reclassification did not impact any other amounts presented in the consolidated financial statements.

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The reconciliation of net incurred medical claims to benefit expense included in our consolidated statements of income for periods in 2018 are as follows:

	Three Months Ended						Nine Months Ended   September 30, 2018
	March 31, 2018		June 30, 2018		September 30, 2018
Net incurred medical claims:
Commercial & Specialty Business	$	5,410	$	5,884	$	6,014	$	17,308
Government Business	10,794		11,039		11,397		33,230
Total net incurred medical claims	16,204		16,923		17,411		50,538
Quality improvement and other claims expense	842		805		774		2,421
Benefit expense	$	17,046	$	17,728	$	18,185	$	52,959

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 September 30, 2019, is as follows:

	Commercial & Specialty Business		Government Business		Total
Net medical claims payable, end of period	$	2,910	$	5,825	$	8,735
Ceded medical claims payable, end of period	8		27		35
Insurance lines other than short duration	—		207		207
Gross medical claims payable, end of period	$	2,918	$	6,059	$	8,977

10. Debt

We generally issue senior unsecured notes for long-term borrowing purposes. At September 30, 2019 and December 31, 2018, we had $18,816 and $17,153, respectively, outstanding under these notes.

On September 9, 2019, we issued $850 aggregate principal amount of 2.375% Notes due 2025, or the 2025 Notes, $825 aggregate principal amount of 2.875% Notes due 2029, or the 2029 Notes, and $825 aggregate principal amount of 3.700% Notes due 2049, or the 2049 Notes, under our shelf registration statement. Interest on the 2025 Notes is payable semi-annually in arrears on January 15 and July 15 of each year, commencing January 15, 2020. Interest on the 2029 Notes and the 2049 Notes is payable semi-annually in arrears on March 15 and September 15 each year, commencing March 15, 2020. The proceeds are being used for working capital and general corporate purposes, including, but not limited to, the repurchase of our common stock pursuant to our share repurchase program, repayment of short-term and long-term debt and to fund acquisitions.

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 6.0 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 $18. At the remarketing, we also issued $850 aggregate 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.

-27-

We have an unsecured surplus note with an outstanding principal balance of $25 at both September 30, 2019 and December 31, 2018.

We have a senior revolving credit facility, or the 5-Year Facility, with a group of lenders for general corporate purposes. In June 2019, we amended and restated the credit agreement for the 5-Year Facility to, among other things, extend the maturity date of the 5-Year Facility from August 2020 to June 2024 and decreased the amount of credit available under the 5-Year Facility from $3,500 to $2,500. In June 2019, we also entered into a 364-day senior revolving credit facility, or 364-Day Facility, with a group of lenders for general corporate purposes, which provides for credit in the amount of $1,000 and matures in June 2020. There were no amounts outstanding under the 5-Year Facility or the 364-Day Facility at any time during the nine months ended September 30, 2019 or under the 5-Year Facility at December 31, 2018.

Through certain subsidiaries, we have entered into multiple 364-day lines of credit, or the Subsidiary Credit Facilities, with separate lenders for general corporate purposes. The Subsidiary Credit Facilities provide combined credit of up to $600. At September 30, 2019 and December 31, 2018, $150 and $500, respectively, were outstanding under our Subsidiary Credit Facilities.

We have an authorized commercial paper program of up to $3,500, the proceeds of which may be used for general corporate purposes. In August 2019, we increased the amount available under the commercial paper program from $2,500 to $3,500. At September 30, 2019 and December 31, 2018, we had $500 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 nine months ended September 30, 2019, $20 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 $73. 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 September 30, 2019 the related balances, conversion rate and conversion price of the Debentures:

Outstanding principal amount	$	267
Unamortized debt discount	$	85
Net debt carrying amount	$	179
Equity component carrying amount	$	97
Conversion rate (shares of common stock per $1,000 of principal amount)	13.9250
Effective conversion price (per $1,000 of principal amount)	$	71.8129

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 $560 and $645 in outstanding short-term borrowings from FHLBs, at September 30, 2019 and December 31, 2018 with fixed interest rates of 1.990% and 2.458% respectively.

All debt is a direct obligation of Anthem, Inc., except for the surplus note, the FHLB borrowings, and the Subsidiary Credit Facilities.

-28-

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 $700 at September 30, 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 twenty-eight states 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. 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. In April 2019, plaintiffs filed their motions for class certification in conjunction with their supporting expert reports. Defendants filed their motions to exclude plaintiffs’ experts, as well as their opposition to plaintiffs’ motions for class certification, in July 2019. The case has been stayed until January 2020. We intend to vigorously defend these suits; however, their ultimate outcome cannot be presently determined.

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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. The Superior Court has scheduled trial for March 23, 2020. The parties are currently engaged in discovery and are in the process of retaining experts. 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 we entered into 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. Discovery is scheduled to be completed in December 2019. 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

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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 but has not yet been decided. 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 November 25, 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 us and our 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

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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. 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 reimbursement 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. CVS Health began 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. 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 September 30, 2019.

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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 nine months ended September 30, 2019 and 2018 is as follows: 

Declaration Date	Record Date	Payment Date	Cash Dividend per Share	Total
Nine Months Ended September 30, 2019
January 29, 2019	March 18, 2019	March 29, 2019	$0.80	$	206
April 23, 2019	June 10, 2019	June 25, 2019	$0.80	$	206
July 23, 2019	September 10, 2019	September 25, 2019	$0.80	$	204
Nine Months Ended September 30, 2018
January 30, 2018	March 9, 2018	March 23, 2018	$0.75	$	192
April 24, 2018	June 8, 2018	June 25, 2018	$0.75	$	196
July 24, 2018	September 10, 2018	September 25, 2018	$0.75	$	195

On October 22, 2019, our Audit Committee declared a fourth quarter 2019 dividend to shareholders of $0.80 per share, payable on December 20, 2019 to shareholders of record at the close of business on December 5, 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 October 1, 2019 through October 16, 2019 (subsequent to September 30, 2019) and for the nine months ended September 30, 2019 and 2018 is as follows:

	October 1, 2019   Through   October 16, 2019		Nine Months Ended September 30
			2019		2018
Shares repurchased	0.4		5.2		5.0
Average price per share	$	238.71	$	270.42	$	240.15
Aggregate cost	$	104	$	1,396	$	1,192
Authorization remaining at the end of the period	$	3,994	$	4,098	$	5,986

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.

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Stock Incentive Plans

A summary of stock option activity for the nine months ended September 30, 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		306.74
Exercised	(0.9	)	127.92
Forfeited or expired	(0.1	)	238.81
Outstanding at September 30, 2019	3.4		185.47		6.28	$	233
Exercisable at September 30, 2019	2.2		142.26		5.02	$	220

A summary of the nonvested restricted stock activity, including restricted stock units, for the nine months ended September 30, 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		306.13
Vested	(0.8	)	152.97
Forfeited	—		243.77
Nonvested at September 30, 2019	1.4		240.92

During the nine months ended September 30, 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 nine months ended September 30, 2019 and 2018:

	Nine Months Ended September 30
	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

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The following weighted-average fair values per option or share were determined for the nine months ended September 30, 2019 and 2018: 

	Nine Months Ended September 30
	2019		2018
Options granted during the period	$	68.69	$	55.44
Restricted stock awards granted during the period	306.13		233.27

13. Accumulated Other Comprehensive Loss

A reconciliation of the components of accumulated other comprehensive loss at September 30, 2019 and 2018 is as follows:

	September 30
	2019			2018
Investments, excluding non-credit component of other-than-temporary impairments:
Gross unrealized gains	$	770		$	170
Gross unrealized losses	(54		)	(289		)
Net pre-tax unrealized gains (losses)	716			(119		)
Deferred tax (liability) asset	(164		)	24
Net unrealized gains (losses) on investments	552			(95		)
Non-credit components of other-than-temporary impairments on investments:
Unrealized losses	(5		)	(2		)
Deferred tax asset	1			—
Net unrealized non-credit component of other-than-temporary impairments on investments	(4		)	(2		)
Cash flow hedges:
Gross unrealized losses	(340		)	(315		)
Deferred tax asset	63			66
Net unrealized losses on cash flow hedges	(277		)	(249		)
Defined benefit pension plans:
Deferred net actuarial loss	(730		)	(587		)
Deferred prior service credits	(1		)	(1		)
Deferred tax asset	188			153
Net unrecognized periodic benefit costs for defined benefit pension plans	(543		)	(435		)
Postretirement benefit plans:
Deferred net actuarial loss	(57		)	(75		)
Deferred prior service costs	25			37
Deferred tax asset	8			10
Net unrecognized periodic benefit costs for postretirement benefit plans	(24		)	(28		)
Foreign currency translation adjustments:
Gross unrealized losses	(4		)	(2		)
Deferred tax asset	1			—
Net unrealized losses on foreign currency translation adjustments	(3		)	(2		)
Accumulated other comprehensive loss	$	(299	)	$	(811	)

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Other comprehensive income (loss) reclassification adjustments for the three months ended September 30, 2019 and 2018 are as follows:

	Three Months Ended September 30
	2019			2018
Investments:
Net holding gain (loss) on investment securities arising during the period, net of tax (expense) benefit of ($35) and $12, respectively	$	119		$	(45	)
Reclassification adjustment for net realized (gain) loss on investment securities, net of tax expense (benefit) of $1 and ($3), respectively	(3		)	9
Total reclassification adjustment on investments	116			(36		)
Non-credit component of other-than-temporary impairments on investments:
Non-credit component of other-than-temporary impairments on investments, net of tax expense of ($0) and ($2), respectively	(1		)	(2		)
Cash flow hedges:
Holding (loss) gain, net of tax expense of ($2) and ($1), respectively	(34		)	2
Other:
Net change in unrecognized periodic benefit costs for defined benefit pension and postretirement benefit plans, net of tax expense of ($1) and ($2), respectively	4			7
Foreign currency translation adjustment, net of tax expense of ($0) and ($0), respectively	(1		)	—
Net gain (loss) recognized in other comprehensive income, net of tax (expense) benefit of ($37) and $4, respectively	$	84		$	(29	)

Other comprehensive income (loss) reclassification adjustments for the nine months ended September 30, 2019 and 2018 are as follows:

	Nine Months Ended September 30
	2019			2018
Investments:
Net holding gain (loss) on investment securities arising during the period, net of tax (expense) benefit of ($205) and $109, respectively	$	705		$	(378	)
Reclassification adjustment for net realized (gain) loss on investment securities, net of tax benefit of $(1) and $(7), respectively	6			25
Total reclassification adjustment on investments	711			(353		)
Non-credit component of other-than-temporary impairments on investments:
Non-credit component of other-than-temporary impairments on investments, net of tax expense of ($0) and ($2), respectively	(2		)	(2		)
Cash flow hedges:
Holding (loss) gain, net of tax expense of ($2) and ($9), respectively	(31		)	34
Other:
Net change in unrecognized periodic benefit costs for defined benefit pension and postretirement benefit plans, net of tax expense of ($3) and ($7), respectively	10			22
Foreign currency translation adjustment, net of tax expense of ($0) and ($1), respectively	(1		)	—
Net gain (loss) recognized in other comprehensive income, net of tax (expense) benefit of ($211) and $83, respectively	$	687		$	(299	)

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14. Earnings per Share

The denominator for basic and diluted earnings per share for the three and nine months ended September 30, 2019 and 2018 is as follows:

	Three Months Ended   September 30		Nine Months Ended   September 30
	2019	2018	2019	2018
Denominator for basic earnings per share – weighted-average shares	255.2	259.5	256.3	258.0
Effect of dilutive securities – employee stock options, nonvested restricted stock awards, convertible debentures and equity units	4.8	5.9	4.8	6.3
Denominator for diluted earnings per share	260.0	265.4	261.1	264.3

During the three months ended September 30, 2019 and 2018, weighted-average shares related to certain stock options of 0.7 and 0.0, respectively, were excluded from the denominator for diluted earnings per share because the stock options were anti-dilutive. During each of the nine months ended September 30, 2019 and 2018, weighted-average shares related to certain stock options of 0.6 and 0.4, respectively, were excluded from the denominator for diluted earnings per share because the stock options were anti-dilutive.

During the three and nine months ended September 30, 2019, we issued approximately 0.0 and 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 and nine months ended September 30, 2018, we issued approximately 0.0 and 0.9 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.

Prior to the second quarter of 2019, our Other segment included certain eliminations and corporate expenses not allocated to either of our other reportable segments. Beginning in the second quarter of 2019, our Other segment also includes IngenioRx, our PBM, which began its operations during the second quarter of 2019. In addition, during the second quarter, we reclassified our Diversified Business Group, or DBG, our integrated health services business, from our Government Business segment to the Other segment to reflect changes in how our segments are being managed. Amounts for 2018 have been reclassified to conform to the current year presentation for comparability. Based on the FASB guidance, as of September 30, 2019, IngenioRx and DBG do not collectively meet the quantitative thresholds for an operating segment.

Affiliated revenues represent revenues or cost for services provided by IngenioRx and DBG to our subsidiaries, are recorded at cost or management’s estimate of fair market value, and are eliminated in consolidation.

For our segment reporting, operating gains (losses) generated from IngenioRx and DBG affiliated activity have been included in our Commercial & Specialty Business and Government Business based upon their utilization of services from IngenioRx and DBG.

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Financial data by reportable segment for the three and nine months ended September 30, 2019 and 2018 is as follows:

	Commercial & Specialty Business		Government Business		Other			Eliminations			Total
Three Months Ended September 30, 2019
Operating revenue - unaffiliated	$	9,284	$	15,955	$	1,205		$	—		$	26,444
Operating revenue - affiliated	—		—		1,303			(1,303		)	—
Operating gain (loss)	930		616		(18		)	—			1,528
Three Months Ended September 30, 2018
Operating revenue - unaffiliated	$	8,933	$	13,979	$	68		$	—		$	22,980
Operating revenue - affiliated	—		—		330			(330		)	—
Operating gain (loss)	834		456		(41		)	—			1,249
Nine Months Ended September 30, 2019
Operating revenue - unaffiliated	$	28,093	$	46,419	$	1,497		$	—		$	76,009
Operating revenue - affiliated	—		—		2,353			(2,353		)	—
Operating gain (loss)	3,511		1,471		(81		)	—			4,901
Nine Months Ended September 30, 2018
Operating revenue - unaffiliated	$	26,939	$	40,951	$	147		$	—		$	68,037
Operating revenue - affiliated	—		—		961			(961		)	—
Operating gain (loss)	3,284		1,477		(85		)	—			4,676

The major product revenues for each of the reportable segments for the three and nine months ended September 30, 2019 and 2018 are as follows:

	Three Months Ended   September 30						Nine Months Ended   September 30
	2019			2018			2019			2018
Commercial & Specialty Business
Managed care products	$	7,542		$	7,211		$	22,806		$	21,852
Managed care services	1,330			1,332			4,049			3,913
Dental/Vision products and services	325			306			975			914
Other	87			84			263			260
Total Commercial & Specialty Business	9,284			8,933			28,093			26,939
Government Business
Managed care products	15,847			13,860			46,111			40,610
Managed care services	108			119			308			341
Total Government Business	15,955			13,979			46,419			40,951
Other
Other	2,508			398			3,850			1,108
Eliminations
Eliminations	(1,303		)	(330		)	(2,353		)	(961		)
Total product revenues	$	26,444		$	22,980		$	76,009		$	68,037

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. 

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A reconciliation of reportable segments’ operating revenue to the amounts of total revenues included in our consolidated statements of income for the three and nine months ended September 30, 2019 and 2018 is as follows:

	Three Months Ended   September 30						Nine Months Ended   September 30
	2019			2018			2019			2018
Reportable segments’ operating revenue	$	26,444		$	22,980		$	76,009		$	68,037
Net investment income	242			250			737			708
Net realized gains on financial instruments	1			27			90			5
Other-than-temporary impairment losses recognized in income	(13		)	(6		)	(30		)	(18		)
Total revenues	$	26,674		$	23,251		$	76,806		$	68,732

A reconciliation of reportable segments’ operating gain to income before income tax expense included in our consolidated statements of income for the three and nine months ended September 30, 2019 and 2018 is as follows:

	Three Months Ended   September 30						Nine Months Ended   September 30
	2019			2018			2019			2018
Reportable segments’ operating gain	$	1,528		$	1,249		$	4,901		$	4,676
Net investment income	242			250			737			708
Net realized gains on financial instruments	1			27			90			5
Other-than-temporary impairment losses recognized in income	(13		)	(6		)	(30		)	(18		)
Interest expense	(185		)	(188		)	(556		)	(564		)
Amortization of other intangible assets	(84		)	(91		)	(256		)	(265		)
Gain (loss) on extinguishment of debt	—			1			1			(17		)
Income before income tax expense	$	1,489		$	1,242		$	4,887		$	4,525

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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.

The information related to our leases is as follows:

	Balance Sheet Location	September 30, 2019
Operating Leases
Right-of-use assets	Other noncurrent assets	$	577
Lease liabilities, current	Other current liabilities	167
Lease liabilities, noncurrent	Other noncurrent liabilities	473

	Three Months Ended September 30, 2019			Nine Months Ended September 30, 2019
Lease Expense
Operating lease expense	$	48		$	138
Short-term lease expense	9			33
Sublease income	(4		)	(12		)
Total lease expense	$	53		$	159
Other information
Operating cash paid for amounts included in the measurement of lease liabilities, operating leases	$	43		$	132
Right-of-use assets obtained in exchange for new lease liabilities, operating leases	$	33		$	33
Weighted average remaining lease term, operating leases	6 years			6 years
Weighted average discount rate, operating leases	3.96		%	3.96		%

At September 30, 2019, future lease payments for noncancellable operating leases with initial or remaining terms of one year or more are as follows:

2019 (excluding the nine months ended September 30, 2019)	$	60
2020	163
2021	133
2022	121
2023	103
Thereafter	79
Total future minimum payments	659
Less imputed interest	(19		)
Total lease liabilities	$	640

As of September 30, 2019, we have additional operating leases for building spaces that have not yet commenced, and some building spaces are being constructed by the lessors and their agents. These leases have terms of up to 12 years and are expected to commence on various dates during 2020 and 2021 when the construction is complete and we take possession of the buildings. The undiscounted lease payments for these leases, which are not included in the tables above, aggregate $147.

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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 and nine months ended September 30, 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 41 medical members through our affiliated health plans as of September 30, 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 30 counties 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 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. Also, beginning in the second quarter of 2019, we provide pharmacy benefits management services through our IngenioRx subsidiary. 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. CVS Health began providing certain PBM services to IngenioRx in the second quarter of 2019

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pursuant to the CVS PBM Agreement. We expect IngenioRx to provide our members with more cost-effective solutions and improve our ability to integrate pharmacy benefits within our 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. 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.

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.

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 variances 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” included in 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 may 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 and nine months ended September 30, 2018, we recognized $362 and $1,157, respectively, 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 June 2019, we announced our entrance into an agreement to acquire Beacon Health Options, Inc., or Beacon, the largest independently held behavioral health organization in the country. Beacon serves approximately forty million individuals across all fifty states. This acquisition aligns with our strategy to diversify into health services and deliver both integrated solutions and care delivery models that personalize care for people with complex and chronic conditions. The acquisition is expected to close late in the fourth quarter of 2019 and is subject to standard closing conditions and customary approvals.

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 from Express Scripts began on March 2, 2019. CVS Health began 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.

In February 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.

In May 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 September 30, 2019, total medical membership increased 1.1, or 2.7%. Our medical membership grew across our reportable business segments. 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 September 30, 2019 was $26,444, an increase of $3,464, or 15.1%, from the three months ended September 30, 2018. The increase in operating revenue for the three months ended September 30, 2019 compared to 2018 was primarily driven by higher premiums in our Government Business segment and increased administrative fees and other revenue in our Other segment. Operating revenue for the nine months ended September 30, 2019 was $76,009, an increase of $7,972, or 11.7%, from the nine months ended September 30, 2018. The increase in operating revenue for the nine months ended September 30, 2019 compared to 2018 was primarily a result of higher premiums in our Government Business segment and, to a lesser extent, increased administrative fees and other revenue in our Other segment and higher premiums in our Commercial & Specialty Business segment.

Net income for the three months ended September 30, 2019 was $1,183, an increase of $223, or 23.2%, from the three months ended September 30, 2018. The increase in net income for the three months ended September 30, 2019 compared to 2018 was driven by improved operating results in our Government Business and Commercial & Specialty Business segments. Net income for the nine months ended September 30, 2019 was $3,873, an increase of $548, or 16.5%, from the nine months ended September 30, 2018. The increase in net income for the nine months ended September 30, 2019 compared to 2018 was due to improved operating results in our Commercial & Specialty Business segment and lower income tax expense.

Our diluted earnings per share, or EPS, was $4.55 for the three months ended September 30, 2019, which represented a 25.7% increase from EPS of $3.62 for the three months ended September 30, 2018. Our fully-diluted EPS was $14.83 for the

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nine months ended September 30, 2019, which represented a 17.9% increase from fully-diluted EPS of $12.58 for the nine months ended September 30, 2018. The increase in EPS for the three and nine months ended September 30, 2019 compared to 2018 resulted from the increase in net income in 2019, and to a lesser extent, the lower number of shares outstanding in 2019.

Operating cash flow for the nine months ended September 30, 2019 and 2018 was $4,734 and $3,364, respectively. This increase was primarily due to the impact of membership increases in our Medicaid and Medicare businesses. These increases were partially offset by lower premium receipts as a result of the suspension of the HIP Fee for 2019.

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Membership

The following table presents our medical membership by customer type, funding arrangement and reportable segment as of September 30, 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.

	September 30
(In thousands)	2019	2018 1	Change		% Change
Medical Membership
Customer Type
Local Group	15,659	15,688	(29	)	(0.2	)%
Individual	711	692	19		2.7	%
National:
National Accounts	7,666	7,610	56		0.7	%
BlueCard®	5,967	5,794	173		3.0	%
Total National	13,633	13,404	229		1.7	%
Medicare:
Medicare Advantage	1,203	992	211		21.3	%
Medicare Supplement	893	837	56		6.7	%
Total Medicare	2,096	1,829	267		14.6	%
Medicaid	7,293	6,731	562		8.3	%
Federal Health Products & Services	1,592	1,557	35		2.2	%
Total Medical Membership by Customer Type	40,984	39,901	1,083		2.7	%
Funding Arrangement
Self-Funded	25,368	25,253	115		0.5	%
Fully-Insured	15,616	14,648	968		6.6	%
Total Medical Membership by Funding Arrangement	40,984	39,901	1,083		2.7	%
Reportable Segment
Commercial & Specialty Business	30,003	29,784	219		0.7	%
Government Business	10,981	10,117	864		8.5	%
Total Medical Membership by Reportable Segment	40,984	39,901	1,083		2.7	%
Other Membership
Life and Disability Members	4,970	4,701	269		5.7	%
Dental Members	5,942	5,804	138		2.4	%
Dental Administration Members	5,526	5,367	159		3.0	%
Vision Members	7,232	6,906	326		4.7	%
Medicare Part D Standalone Members	285	312	(27	)	(8.7	)%

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 increased across our reportable business segments and the increase was driven primarily by growth in our fully-insured businesses. Fully-insured membership increased primarily due to growth in our Medicaid, Medicare and National Accounts businesses. Self-funded medical membership increased primarily due to higher activity from BlueCard^® membership, partially offset by the decrease in our Large Group self-funded membership, which declined as a result of competitive pressures. 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 exceeding lapses. 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.

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 Medicare and Large Group businesses.

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Consolidated Results of Operations

Our consolidated summarized results of operations and other financial information for the three and nine months ended September 30, 2019 and 2018 are as follows: 

	Three Months Ended   September 30						Nine Months Ended   September 30						Change
													Three Months Ended   September 30					Nine Months Ended   September 30
													2019 vs. 2018					2019 vs. 2018
	2019			2018			2019			2018			$			%		$			%
Total operating revenue	$	26,444		$	22,980		$	76,009		$	68,037		$	3,464		15.1	%	$	7,972		11.7	%
Net investment income	242			250			737			708			(8		)	(3.2	)%	29			4.1	%
Net realized gains on financial instruments	1			27			90			5			(26		)	(96.3	)%	85			1,700.0	%
Other-than-temporary impairment losses recognized in income	(13		)	(6		)	(30		)	(18		)	(7		)	116.7	%	(12		)	66.7	%
Total revenues	26,674			23,251			76,806			68,732			3,423			14.7	%	8,074			11.7	%
Benefit expense	20,753			18,185			60,403			52,959			2,568			14.1	%	7,444			14.1	%
Cost of products sold	745			—			843			—			745			NM		843			NM
Selling, general and administrative expense	3,418			3,546			9,862			10,402			(128		)	(3.6	)%	(540		)	(5.2	)%
Other expense1	269			278			811			846			(9		)	(3.2	)%	(35		)	(4.1	)%
Total expenses	25,185			22,009			71,919			64,207			3,176			14.4	%	7,712			12.0	%
Income before income tax expense	1,489			1,242			4,887			4,525			247			19.9	%	362			8.0	%
Income tax expense	306			282			1,014			1,200			24			8.5	%	(186		)	(15.5	)%
Net income	$	1,183		$	960		$	3,873		$	3,325		$	223		23.2	%	$	548		16.5	%
Average diluted shares outstanding	260.0			265.4			261.1			264.3			(5.4		)	(2.0	)%	(3.2		)	(1.2	)%
Diluted net income per share	$	4.55		$	3.62		$	14.83		$	12.58		$	0.93		25.7	%	$	2.25		17.9	%
Effective tax rate	20.6		%	22.7		%	20.7		%	26.5		%				(210)bp3					(580)bp3
Benefit expense ratio2	87.2		%	84.8		%	86.1		%	83.3		%				240bp3					280bp3
Selling, general and administrative expense ratio4	12.9		%	15.4		%	13.0		%	15.3		%				(250)bp3					(230)bp3
Income before income tax expense as a percentage of total revenues	5.6		%	5.3		%	6.4		%	6.6		%				30bp3					(20)bp3
Net income as a percentage of total revenues	4.4		%	4.1		%	5.0		%	4.8		%				30bp3					20bp3

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

NM Not meaningful.

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 September 30, 2019 and 2018 were $23,793 and $21,451, respectively. Premiums for the nine months ended September 30, 2019 and 2018 were $70,137 and $63,602, 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 September 30, 2019 Compared to the Three Months Ended September 30, 2018

The increase in total operating revenue was primarily due to higher premiums and increased administrative fees and other revenue. The higher premiums were due to membership growth primarily in our Government Business segment. The increase was further attributable to rate increases across our businesses designed to cover overall cost trends. These increases in premiums were partially offset by the impact of the HIP Fee suspension for 2019. The increase in administrative fees and other revenue was primarily driven by IngenioRx, which began its operations during the second quarter of 2019.

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Benefit expense increased primarily due to membership growth across our reportable business segments.

Our benefit expense ratio increased largely due to the loss of revenue associated with the HIP Fee suspension for 2019.

Cost of products sold reflects the cost of pharmaceuticals dispensed by IngenioRx for our self-funded customers. IngenioRx began operations during the second quarter of 2019, so there was no cost of products sold recognized in 2018.

Our selling, general and administrative expense decreased primarily due to the suspension of the HIP Fee for 2019. This decrease was partially offset by a net increase in spend to support growth in our businesses.

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

Our income tax expense increased primarily due to the 2018 remeasurement of deferred tax assets and liabilities against the prior year provisional estimates pursuant to the Tax Cuts and Jobs Act. This increase was partially offset by the suspension of the non-tax deductible HIP Fee for 2019. Our 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.

Nine Months Ended September 30, 2019 Compared to the Nine Months Ended September 30, 2018

The increase in total operating revenue was primarily from higher premiums, and, to a lesser extent, increased administrative fees and other revenue. The higher premiums were largely due to new Medicaid businesses and expansions and membership growth in our Medicare business. The increase in premiums was further attributable to 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. The increase in administrative fees and other revenue was primarily driven by Ingenio Rx, which began its operations during the second quarter of 2019.

Net realized gains on financial instruments increased 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 cost experience in our Medicaid business.

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 higher medical cost experience in our Medicaid business.

Cost of products sold reflects the cost of pharmaceuticals dispensed by IngenioRx for our self-funded customers. IngenioRx began operations during the second quarter of 2019, so there was no cost of products sold recognized in 2018.

Our selling, general and administrative expense decreased primarily due to the suspension of the HIP Fee for 2019. This decrease was partially offset by a net increase in spend to support growth in our businesses.

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

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

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revenue as premium income and administrative fees and other revenue. Operating gain is calculated as total operating revenue less benefit expense, cost of products sold and selling, general and administrative expense. It does not include net investment income, net realized gains 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.

Prior to the second quarter of 2019, our Other segment included certain eliminations and corporate expenses not allocated to either of our other reportable segments. Beginning in the second quarter of 2019, our Other segment also includes IngenioRx, our PBM, which began its operations during the second quarter of 2019. In addition, during the second quarter, we reclassified our Diversified Business Group, or DBG, our integrated health services business, from our Government Business segment to the Other segment to reflect changes in how our segments are being managed. Amounts for 2018 have been reclassified to conform to the current year presentation for comparability. Based on the Financial Accounting Standards Board guidance, as of September 30, 2019, IngenioRx and DBG do not collectively meet the quantitative thresholds for an operating segment.

Affiliated revenues represent revenues or cost for services provided by IngenioRx and DBG to our subsidiaries, are recorded at cost or management’s estimate of fair market value, and are eliminated in consolidation.

For our segment reporting, operating gains (losses) generated from IngenioRx and DBG affiliated activity have been included in our Commercial & Specialty Business and Government Business based upon their utilization of services from IngenioRx and DBG.

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The following table presents a summary of the reportable segment financial information for the three and nine months ended September 30, 2019 and 2018:

	Three Months Ended   September 30						Nine Months Ended   September 30						Change
													Three Months Ended   September 30					Nine Months Ended   September 30
													2019 vs. 2018					2019 vs. 2018
	2019			2018 1			2019			2018 1			$			%		$			%
Operating Revenue
Commercial & Specialty Business	$	9,284		$	8,933		$	28,093		$	26,939		$	351		3.9	%	$	1,154		4.3	%
Government Business	15,955			13,979			46,419			40,951			1,976			14.1	%	5,468			13.4	%
Other	2,508			398			3,850			1,108			2,110			530.2	%	2,742			247.5	%
Eliminations	(1,303		)	(330		)	(2,353		)	(961		)	(973		)	NM		(1,392		)	NM
Total operating revenue	$	26,444		$	22,980		$	76,009		$	68,037		$	3,464		15.1	%	$	7,972		11.7	%
Operating Gain (Loss)
Commercial & Specialty Business	$	930		$	834		$	3,511		$	3,284		$	96		11.5	%	$	227		6.9	%
Government Business	616			456			1,471			1,477			160			35.1	%	(6		)	(0.4	)%
Other	(18		)	(41		)	(81		)	(85		)	23			(56.1	)%	4			(4.7	)%
Operating Margin
Commercial & Specialty Business	10.0		%	9.3		%	12.5		%	12.2		%				70	bp				30	bp
Government Business	3.9		%	3.3		%	3.2		%	3.6		%				60	bp				(40	)bp

1 During the second quarter of 2019, we reclassified DBG from our Government Business segment to our Other segment to reflect changes in how our segments are being managed. Accordingly, certain amounts for the three and nine months ended September 30, 2018 have been reclassified to conform to the current year presentation for comparability.

Three Months Ended September 30, 2019 Compared to the Three Months Ended September 30, 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 due to membership increases in our fully-insured National Accounts and Individual ACA businesses. These increases were partially offset by the impact of the HIP Fee suspension for 2019.

The increase in operating gain was primarily driven by greater penetration of value-added services, including our pharmacy and integrated health offerings. This increase was partially offset by unfavorable reserve development.

Government Business

Operating revenue increased primarily due to higher premium revenue as a result of new Medicaid businesses and expansions, including specialized service populations, and membership growth in our Medicare business. The increase in premium revenue was further attributable to rate increases designed to cover overall cost trends in our Medicaid and Medicare businesses, and increased reimbursed benefit utilization in our Federal Health Products and Services, or FHPS, business. These increases were partially offset by the impact of the HIP Fee suspension for 2019.

Operating gain increased as a result of improved medical cost performance in our Medicaid business. The increase was partially offset by the impact of the HIP Fee suspension for 2019.

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Other

Operating revenue increased due to higher administrative fees and other revenue from IngenioRx and DBG. The increase was primarily driven by growth in our pharmacy services provided by IngenioRx, which commenced operations during the second quarter of 2019 and continued migrating pharmacy services from Express Scripts during the third quarter of 2019.

Operating loss increased primarily as a result of changes in unallocated corporate expenses.

Nine Months Ended September 30, 2019 Compared to the Nine Months Ended September 30, 2018

Commercial & Specialty Business

Operating revenue increased primarily due to higher premium revenue, and to a lesser extent, increased administrative fees and other revenue. Premium revenue was higher as a result of rate increases in our Local Group business designed to cover overall cost trends and membership increases in our fully-insured National Accounts and Individual ACA businesses. These increases in premium revenue were partially offset by the impact of the HIP Fee suspension for 2019. The increase in administrative fees and other revenues was due to higher penetration of value-added services for self-funded members in our Large Group and National Accounts businesses.

The increase in operating gain was primarily driven by greater penetration of value-added services, including our pharmacy and integrated health offerings. This increase was partially offset by the impact of the HIP Fee suspension for 2019 and higher favorable adjustments recognized in 2018 related to estimates for the ACA risk adjustment premium stabilization program.

Government Business

Operating revenue increased primarily due to higher premium revenue as a result of new Medicaid businesses and expansions, including specialized service populations, and membership growth in our Medicare business. The increase in premium revenue was further attributable to rate increases designed to cover overall cost trends in our Medicare and Medicaid businesses as well as increased reimbursed benefit utilization in our FHPS business. These increases were partially offset by the impact of the HIP Fee suspension for 2019.

Operating gain decreased due to the impact of the HIP Fee suspension for 2019 and continued elevated medical cost experience in our Medicaid business in certain states. These decreases were mostly offset by the membership growth in our Medicaid and Medicare businesses.

Other

Operating revenue increased due to higher administrative fees and other revenue from IngenioRx and DBG. The increase was primarily driven by growth in our pharmacy services provided by IngenioRx, which commenced operations during the second quarter of 2019 and continued migrating pharmacy services from Express Scripts during the third quarter of 2019.

Operating loss decreased primarily as a result of changes in unallocated corporate expenses.

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 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 September 30, 2019, our critical accounting policies and estimates have not changed from those described in our 2018 Annual Report on Form 10-K.

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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 September 30, 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 nine months ended September 30, 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 nine months ended September 30, 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
	Nine Months Ended   September 30
	2019		2018
Assumed trend factors	$	311	$	477
Assumed completion factors	126		381
Total	$	437	$	858

The favorable development recognized in the nine months ended September 30, 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 85.5% and 86.6% for the nine months ended September 30, 2019 and 2018, respectively. This ratio serves as an indicator of claims processing speed whereby claims were processed slightly faster during the nine months ended September 30, 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 nine months ended September 30, 2019, this metric was 6.4%, largely driven by favorable trend factor development at the end of 2018. For the nine months ended September 30, 2018, this metric was 12.5%, largely driven by favorable trend factor development at the end of 2017 as well as favorable completion factor development from 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 nine months ended September 30, 2019, this metric was 0.6%, which was calculated using the redundancy of $437. For the nine months ended September 30, 2018, the comparable metric was 1.2%, which was calculated using the redundancy of $858. 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 nine months ended September 30, 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.

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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 and nine months ended September 30, 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.

Liquidity

A summary of our major sources and uses of cash and cash equivalents for the nine months ended September 30, 2019 and 2018 is as follows:

	Nine Months Ended   September 30						2019 vs. 2018
	2019			2018			Change
Sources of Cash:
Net cash provided by operating activities	$	4,734		$	3,364		$	1,370
Issuance of common stock under Equity Units stock purchase contracts	—			1,250			(1,250		)
Issuances of commercial paper and short- and long-term debt, net of repayments	918			—			918
Proceeds from sales, maturities, calls and redemptions of investments, net of purchases	—			857			(857		)
Proceeds from issuance of common stock under employee stock plans	137			133			4
Changes in bank overdrafts	250			97			153
Other sources of cash, net	139			326			(187		)
Total sources of cash	6,178			6,027			151
Uses of Cash:
Purchases of investments, net of proceeds from sales, maturities, calls and redemptions	(2,895		)	—			(2,895		)
Purchases of subsidiaries, net of cash acquired	—			(1,732		)	1,732
Repurchase and retirement of common stock	(1,396		)	(1,192		)	(204		)
Purchases of property and equipment	(726		)	(888		)	162
Repayments of commercial paper and short- and long-term debt, net of issuances	—			(617		)	617
Cash dividends	(616		)	(583		)	(33		)
Other uses of cash, net	(288		)	(363		)	75
Total uses of cash	(5,921		)	(5,375		)	(546		)
Effect of foreign exchange rates on cash and cash equivalents	(1		)	(1		)	—
Net increase in cash and cash equivalents	$	256		$	651		$	(395	)

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

Other significant changes in sources or uses of cash year-over-year included an increase in net purchases of investments in 2019 compared to net proceeds from sales, maturities, calls and redemptions of investments in 2018, an increase in net proceeds from the issuance of commercial paper and short- and long-term debt in 2019 compared to net repayments in 2018, a decrease in cash received from the issuance of common stock under Equity Units stock purchase contracts 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 $26,997 at September 30, 2019. Since December 31, 2018, total cash, cash equivalents and investments in fixed maturity and equity securities increased by $4,358, 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 September 30, 2019, we held $2,998 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.

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 September 30, 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, liquidity, 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

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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 September 30, 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.

Contractual Obligations and Commitments

We believe that funds from future operating cash flows, cash and investments and funds available under our 5-year and 364-day senior revolving credit facilities 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 debt issuances. 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 September 30, 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.

During the three months ended September 30, 2019, we implemented certain additional internal controls associated with our new IngenioRx pharmacy business. Other than these new controls, there have been no changes in our internal control over financial reporting that occurred during the three months ended September 30, 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 September 30, 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)
July 1, 2019 to July 31, 2019	434,343	$	291.21	431,500	$	4,616
August 1, 2019 to August 31, 2019	753,321	276.59		752,268	4,408
September 1, 2019 to September 30, 2019	1,234,527	251.71		1,230,971	4,098
	2,422,191			2,414,739

1 Total number of shares purchased includes 7,452 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 September 30, 2019, we repurchased 2,414,739 shares at a cost of $644 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 October 1, 2019 and October 16, 2019, we repurchased 434,700 shares at a cost of $104 bringing our current availability to $3,994 at October 16, 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 15, 2019, incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed on May 15, 2019.
3.2		Bylaws of the Company, as amended effective May 15, 2019, incorporated by reference to Exhibit 3.2 to the Company’s Current Report on Form 8-K/A filed on June 5, 2019.
4.6 (h)		Form of 2.375% Notes due 2025, incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K filed on September 9, 2019.
(i)		Form of 2.875% Notes due 2029, incorporated by reference to Exhibit 4.2 to the Company’s Current Report on Form 8-K filed on September 9, 2019.
(j)		Form of 3.700% Notes due 2049, incorporated by reference to Exhibit 4.3 to the Company’s Current Report on Form 8-K filed on September 9, 2019.
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	*	2017 Anthem Incentive Compensation Plan, as amended and restated effective October 1, 2019.
10.3	*	Anthem, Inc. Comprehensive Nonqualified Deferred Compensation Plan, as amended and restated effective October 1, 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 September 30, 2019, formatted in Inline XBRL (Inline 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. The instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
104		Cover Page Interactive Data File formatted in Inline XBRL and contained in Exhibit 101.
*		Indicates management contracts or compensatory plans or arrangements.

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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: October 23, 2019	By:	/S/  JOHN E. GALLINA
		John E. Gallina Executive Vice President and Chief Financial Officer (Duly Authorized Officer and Principal Financial Officer)
Date: October 23, 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

Exhibit 10.2

2017 ANTHEM INCENTIVE COMPENSATION PLAN

Anthem, Inc., an Indiana corporation (the “Company”), has adopted the 2017 Anthem Incentive Compensation Plan (the “Plan”) for the benefit of non-employee directors of the Company and officers and eligible employees and consultants of the Company and any Subsidiaries and Affiliates (as each term defined below), as follows:

ARTICLE I.

ESTABLISHMENT; PURPOSES; AND DURATION

1.1Establishment of the Plan. The Board of Directors (defined below) established and adopted the Plan on March 01, 2017 and it becomes effective upon approval by the Company’s shareholders and hereby amends and restates the Plan effective as of October 1, 2019. The Plan permits the grant of Nonqualified Stock Options, Incentive Stock Options, Stock Appreciation Rights, Restricted Stock, Restricted Stock Units, Performance Units, Performance Shares, Cash-Based Awards and Other Stock-Based Awards.

1.2Purposes of the Plan. The purposes of the Plan are to provide additional incentives to non-employee directors of the Company and to those officers, employees and consultants of the Company, Subsidiaries and Affiliates whose substantial contributions are essential to the continued growth and success of the business of the Company and the Subsidiaries and Affiliates, in order to strengthen their commitment to the Company and the Subsidiaries and Affiliates, and to attract and retain competent and dedicated individuals whose efforts will result in the long-term growth and profitability of the Company and to further align the interests of such non-employee directors, officers, employees and consultants with the interests of the shareholders of the Company. To accomplish such purposes, the Plan provides that the Company may grant Nonqualified Stock Options, Incentive Stock Options, Stock Appreciation Rights, Restricted Stock, Restricted Stock Units, Performance Units, Performance Shares, Cash-Based Awards and Other Stock-Based Awards.

1.3Duration of the Plan. The Plan shall remain in effect, subject to the right of the Board of Directors to amend or terminate the Plan at any time pursuant to Article XVI, until all Shares subject to it shall have been delivered, and any restrictions on such Shares have lapsed, pursuant to the Plan’s provisions. However, in no event may an Award be granted under the Plan on or after ten years from the date the shareholders approved the Plan (the “Effective Date”).

ARTICLE II.

DEFINITIONS

Whenever used in the Plan, the following terms shall have the meanings set forth below, and when the meaning is intended, the initial letter of the word shall be capitalized:

2.1.“Affiliate” means any entity other than the Company and any Subsidiary that is affiliated with the Company through stock or equity ownership or otherwise and is designated as an Affiliate for purposes of the Plan by the Committee; provided, however, that, notwithstanding any other provisions of the Plan to the contrary, for purposes of NQSOs and SARs, if an individual who otherwise qualifies as an Employee or Non-Employee Director provides services to such an entity and not to the Company or a Subsidiary, such entity may only be designated an Affiliate if the Company qualifies as a “service recipient,” within the meaning of Code Section 409A, with respect to such individual; providedfurther that such definition of “service recipient” shall be determined by (a) applying Code

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Exhibit 10.2

Section 1563(a)(1), (2) and (3), for purposes of determining a controlled group of corporations under Code Section 414(b), using the language “at least 50 percent” instead of “at least 80 percent” each place it appears in Code Section 1563(a)(1), (2) and (3), and by applying Treasury Regulations Section 1.414(c)-2, for purposes of determining trades or businesses (whether or not incorporated) that are under common control for purposes of Code Section 414(c), using the language “at least 50 percent” instead of “at least 80 percent” each place it appears in Treasury Regulations Section 1.414(c)-2, and (b) where the use of Shares with respect to the grant of an Option or SAR to such an individual is based upon legitimate business criteria, by applying Code Section 1563(a)(1), (2) and (3), for purposes of determining a controlled group of corporations under Code Section 414(b), using the language “at least 20 percent” instead of “at least 80 percent” at each place it appears in Code Section 1563(a)(1), (2) and (3), and by applying Treasury Regulations Section 1.414(c)-2, for purposes of determining trades or businesses (whether or not incorporated) that are under common control for purposes of Code Section 414(c), using the language “at least 20 percent” instead of “at least 80 percent” at each place it appears in Treasury Regulations Section 1.414(c)-2.

2.2.“Annual Meeting” means the annual meeting of shareholders at which members of the Board are routinely elected.

2.3.“Award” means, individually or collectively, a grant under the Plan of Nonqualified Stock Options, Incentive Stock Options, Stock Appreciation Rights, Restricted Stock Awards, Restricted Stock Units, Performance Shares, Performance Units, Cash-Based Awards, and Other Stock-Based Awards.

2.4.“Award Agreement” means either: (a) a written agreement entered into by the Company and a Participant setting forth the terms and provisions applicable to an Award granted under the Plan, or (b) a written or electronic statement issued by the Company to a Participant describing the terms and provisions of such Award, including any amendment or modification thereof. The Committee may provide for the use of electronic, internet or other non-paper Award Agreements, and the use of electronic, internet or other non-paper means for the acceptance thereof and actions thereunder by a Participant.

2.5.“Board” or “Board of Directors” means the Board of Directors of the Company.

2.6.“Cash-Based Award” means an Award granted to a Participant, as described in Article IX.

2.7.“Cause” shall have the definition given such term in a Participant’s Award Agreement, or in the absence of any such definition, as determined in good faith by the Committee.

2.8.“Change of Control” means the first to occur of the following events with respect to the Company:

(a)any person (as such term is used in Rule 13d-5 of the SEC under the Exchange Act) or group (as such term is defined in Section 13(d) of the Exchange Act), other than a subsidiary of the Company or any employee benefit plan (or any related trust) of the Company or a subsidiary or affiliate of the Company, becomes the beneficial owner (as defined in Rule 13d-3 under the Exchange Act) of 20% or more of the Shares or of other voting securities representing 20% or more of the combined voting power of all voting securities the Company; provided, however, that (1) no Change of Control shall be deemed to have occurred solely by reason of any such acquisition by a corporation with respect to which, after such acquisition, more than 80% of both the common stock of such corporation and

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Exhibit 10.2

the combined voting power of the voting securities of such corporation are then beneficially owned, directly or indirectly, by the persons who were the beneficial owners of the Shares and other voting securities of the Company immediately before such acquisition, in substantially the same proportion as their ownership of the Shares and other voting securities of the Company immediately before such acquisition; (2) if any person or group owns 20% or more but less than 30% of the combined voting power of the Shares and other voting securities of the Company and such person or group has a No Change of Control Agreement with the Company, no Change of Control shall be deemed to have occurred solely by reason of such ownership for so long as the No Change of Control Agreement remains in effect and such person or group is not in violation of the No Change of Control Agreement; and (3) once a Change of Control occurs under this Section 2.8(a), the occurrence of the next Change of Control (if any) under this Section 2.8(a) shall be determined by reference to a person or group other than the person or group whose acquisition of beneficial ownership created such prior Change of Control unless the original person or group has in the meantime ceased to own 20% or more of the Shares or other voting securities representing 20% or more of the combined voting power of all voting securities of the Company; or

(b)within any period of thirty-six (36) or fewer consecutive months individuals who, as of the first day of such period were members of the Board (the “Incumbent Directors”) cease for any reason to constitute at least 75% of the members of the Board; provided, however, that (1) any individual who becomes a member of the Board after the first day of such period whose nomination for election to the Board was approved by a vote or written consent of at least 75% of the members of the Board who are then Incumbent Directors shall be considered an Incumbent Director, but excluding, for this purpose, any such individual whose initial assumption of office is in connection with an actual or threatened election contest relating to the election of the directors of the Company (as such terms are used in Rule 14a-11 of the SEC under the Exchange Act) or an Imminent Change of Control or other transaction described in Section 2.8(a) or 2.8(c); and (2) once a Change of Control occurs under this Section 2.8(b), the occurrence of the next Change of Control (if any) under this Section 2.8(b) shall be determined by reference to a period of thirty-six (36) or fewer consecutive months beginning not earlier than the date immediately after the date of such prior Change of Control; or

(c)closing of a transaction which is any of the following:

(1)a merger, reorganization or consolidation of the Company (“Merger”), after which (A) the individuals and entities who were the respective beneficial owners of the Shares and other voting securities of the Company immediately before such Merger do not beneficially own, directly or indirectly, more than 60% of, respectively, the Shares or the combined voting power of the common stock and voting securities of the corporation resulting from such Merger, in substantially the same proportion as their ownership of the Shares and other voting securities of the Company immediately before such Merger;

(2)a Merger after which individuals who were members of the Board of Directors immediately before the Merger do not comprise a majority of the members of the Board of Directors of the corporation resulting from such Merger;

(3)a sale or other disposition by the Company of all or substantially all of the assets owned by it (a “Sale”) after which the individuals and entities who were the respective beneficial owners of the Shares and other voting securities of the Company immediately before such Sale do not beneficially own, directly or indirectly, more than 60% of, respectively, the

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Exhibit 10.2

Shares or the combined voting power of the common stock and voting securities of the transferee of substantially all of the Company’s assets in such Sale in substantially the same proportion as their ownership of the Shares and other voting securities of the Company immediately before such Sale;

(4)a Sale after which individuals who were members of the Board of Directors immediately before the Sale do not comprise a majority of the members of the board of directors of the transferee corporation that acquired substantially all of the Company’s assets; or

(5)a liquidation of the Company.

2.9.“Code” means the Internal Revenue Code of 1986, as it may be amended from time to time, including rules and regulations promulgated thereunder and successor provisions and rules and regulations thereto.

2.10.“Committee” means the Compensation Committee of the Board of Directors or a subcommittee thereof, or such other committee designated by the Board to administer the Plan.

2.11.“Consultant” means an independent contractor or consultant who performs services for the Company or a Subsidiary or Affiliate in a capacity other than as an Employee or Director.

2.12. “Designated Percentage” has the meaning given such term in Section 11.2.

2.13.“Director” means any individual who is a member of the Board of Directors of the Company.

2.14.“Dividend Equivalents” means the equivalent value (in cash or Shares) of dividends that would otherwise be paid on the Shares subject to or issued pursuant to an Award (including Restricted Stock Units) but that have not been issued or delivered, as described in Article XII.

2.15.“Effective Date” shall have the meaning ascribed to such term in Section 1.3.

2.16.“Employee” means any person designated as an employee of the Company, a Subsidiary and/or an Affiliate on the payroll records thereof. An Employee shall not include any individual during any period he or she is classified or treated by the Company, a Subsidiary or an Affiliate as an independent contractor, a consultant, or any employee of an employment, consulting, or temporary agency or any other entity other than the Company, a Subsidiary and/or an Affiliate without regard to whether such individual is subsequently determined to have been, or is subsequently retroactively reclassified as a common-law employee of the Company, a Subsidiary and/or an Affiliate during such period. As further provided in Section 20.4, for purposes of the Plan, upon approval by the Committee, the term Employee may also include Employees whose employment with the Company, a Subsidiary or an Affiliate has been terminated subsequent to being granted an Award under the Plan. For the avoidance of doubt, a Director who would otherwise be an “Employee” within the meaning of this Section 2.16 shall be considered an Employee for purposes of the Plan.

2.17.“Exchange Act” means the Securities Exchange Act of 1934, as it may be amended from time to time, including the rules and regulations promulgated thereunder and successor provisions and rules and regulations thereto.

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Exhibit 10.2

2.18.“Fair Market Value” means the fair market value of the Shares as determined by the Committee by the reasonable application of such reasonable valuation method, consistently applied, as the Committee deems appropriate; provided, however, that, with respect to ISOs, for purposes of Section 6.3 and 6.9(c), such fair market value shall be determined subject to Section 422(c)(7) of the Code; providedfurther, however, that (a) if the Shares are readily tradable on an established securities market, Fair Market Value on any date shall be the last sale price reported for the Shares on such market on such date or, if no sale is reported on such date, on the last date preceding such date on which a sale was reported, or (b) if the Shares are admitted for listing on the New York Stock Exchange or other comparable market, Fair Market Value on any date shall be the last sale price reported for the Shares on such market on such date or, if no sale is reported on such date, on the last day preceding such date on which a sale was reported. In each case, the Committee shall determine Fair Market Value in a manner that satisfies the applicable requirements of Code Section 409A.

2.19.“Fees” means all cash amounts payable to a Non-Employee Director for services rendered as a director, including retainer fees, meeting fees and committee fees, but excluding travel and other out-of-pocket expense reimbursements.

2.20.“Fiscal Year” means the calendar year, or such other consecutive twelve-month period as the Committee may select.

2.21.“Freestanding SAR” means an SAR that is granted independently of any Options, as described in Article VII.

2.22.“Grant Price” means the price established at the time of grant of an SAR pursuant to Article VII, used to determine whether there is any payment due upon exercise of the SAR.

2.23.“Imminent Change of Control” means (a) the public announcement (whether by advertisement, press release, press interview, public statement, SEC filing or otherwise) of a proposal or offer which if consummated would be a Change of Control, (b) the making to a director or executive officer of the Company of a written proposal which if consummated would be a Change of Control, or (c) the approval by the Board of Directors or the stockholders of the Company of a transaction that upon closing would be a Change of Control.

2.24.“Incentive Stock Option” or “ISO” means a right to purchase Shares under the Plan in accordance with the terms and conditions set forth in Article VI and which is designated as an Incentive Stock Option and which is intended to meet the requirements of Section 422 of the Code.

2.25.“Incumbent Directors” has the meaning given such term in Section 2.8(b).

2.26.“Insider” means an individual who is, on the relevant date, an officer, director or ten percent (10%) beneficial owner of any class of the Company’s equity securities that is registered pursuant to Section 12 of the Exchange Act, as determined by the Committee in accordance with Section 16 of the Exchange Act.

2.27.“Merger” has the meaning given such term in Section 2.8(c)(1).

2.28.“No Change of Control Agreement” means a legal, binding and enforceable agreement executed by and in effect between a person or all members of a group and the Company that provides that: (1) such person or group shall be bound by the agreement for the time period of not less than five (5) years from its date of execution; (2) such person or group shall not acquire beneficial ownership or voting control equal to a percentage of

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Exhibit 10.2

the Shares or the voting power of other voting securities of the Company that exceeds a percentage specified in the agreement which percentage shall in all events be less than 30%; (3) such person or group may not designate for election as directors a number of directors in excess of 25% of the number of directors on the Board; and (4) such person or group shall vote the Shares and other voting securities of the Company in all matters in the manner directed by the majority of the Incumbent Directors. If any agreement described in the preceding sentence is violated by such person or group or is amended in a fashion such that it no longer satisfies the requirements of the preceding sentence, such agreement shall, as of the date of such violation or amendment, be treated for purposes hereof as no longer constituting a No Change of Control Agreement.

2.29.“Non-Employee Director” means a Director who is not an Employee.

2.30.“Nonqualified Stock Option” or “NQSO” means a right to purchase Shares under the Plan in accordance with the terms and conditions set forth in Article VII and which is not intended to meet the requirements of Section 422 of the Code or otherwise does not meet such requirements.

2.31.“Notice” means notice provided by a Participant to the Company in a manner prescribed by the Committee.

2.32.“Option” or “Stock Option” means an Incentive Stock Option or a Nonqualified Stock Option, as described in Article VI.

2.33.“Option Price” means the price at which a Share may be purchased by a Participant pursuant to an Option.

2.34.“Other Stock-Based Award” means an equity-based or equity-related Award described in Section 10.1, granted in accordance with the terms and conditions set forth in Article X.

2.35.“Participant” means any eligible individual as set forth in Article V who holds one or more outstanding Awards.

2.36. “Performance Period” means the period of time during which the performance goals must be met in order to determine the degree of payout and/or vesting with respect to, or the amount or entitlement to, an Award.

2.37.“Performance Share” means an Award of a performance share granted to a Participant, as described in Article IX.

2.38.“Performance Unit” means an Award of a performance unit granted to a Participant, as described in Article IX.

2.39.“Period of Restriction” means the period during which Shares of Restricted Stock or Restricted Stock Units are subject to a substantial risk of forfeiture, and, in the case of Restricted Stock, the transfer of Shares of Restricted Stock is limited in some way, as provided in Article VIII.

2.40.“Prior Plan” means the “WellPoint 2006 Incentive Compensation Plan,” as amended and restated, effective December 2, 2014 and renamed the “Anthem Incentive Compensation Plan.”

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Exhibit 10.2

2.41.“Qualified Change of Control” means a Change of Control that qualifies as a change in the ownership or effective control of the Company, or in the ownership of a substantial portion of the assets of the Company, within the meaning of Section 409A(a)(2)(A)(v) of the Code.

2.42.“Restricted Stock” means an Award granted to a Participant pursuant to Article VIII.

2.43.“Restricted Stock Unit” means an Award, whose value is equal to a Share, granted to a Participant pursuant to Article VIII.

2.44.“Rule 16b-3” means Rule 16b-3 under the Exchange Act, or any successor rule, as the same may be amended from time to time.

2.45.“Sale” has the meaning given such term in Section 2.8(c)(3).

2.46.“SEC” means the Securities and Exchange Commission.

2.47.“Securities Act” means the Securities Act of 1933, as it may be amended from time to time, including the rules and regulations promulgated thereunder and successor provisions and rules and regulations thereto.

2.48.“Share” means a share of common stock of the Company (including any new, additional or different stock or securities resulting from any change in corporate capitalization as listed in Section 4.3).

2.49.“Stock Appreciation Right” or “SAR” means an Award, granted alone (a “Freestanding SAR”) or in connection with a related Option (a “Tandem SAR”), designated as an SAR, pursuant to the terms of Article VII.

2.50.“Stock Election” has the meaning given such term in Section 11.2.

2.51.“Subsidiary” means any present or future corporation which is or would be a “subsidiary corporation” of the Company as the term is defined in Section 424(f) of the Code.

2.52.“Substitute Awards” means Awards granted or Shares issued by the Company in assumption of, or in substitution or exchange for, options or other awards previously granted, or the right or obligation to grant future options or other awards, by a company acquired by the Company, a Subsidiary and/or an Affiliate or with which the Company, a Subsidiary and/or an Affiliate combines, or otherwise in connection with any merger, consolidation, acquisition of property or stock, or reorganization involving the Company, a Subsidiary or an Affiliate, including a transaction described in Code Section 424(a).

2.53.“Tandem SAR” means a SAR that is granted in connection with a related Option pursuant to Article VII.

2.54.“Termination” means the time when a Participant ceases the performance of services for the Company, any Affiliate or Subsidiary, as applicable, for any reason, with or without Cause, including a Termination by resignation, discharge, death, disability or retirement, but excluding (a) a Termination where there is a simultaneous reemployment (or commencement of service) or continuing employment (or service) of a Participant by the Company, Affiliate or any Subsidiary, (b) at the discretion of the Committee, a Termination that results in a temporary severance, and (c) at the discretion of the Committee, a Termination of an Employee that is immediately followed by the Participant’s service as a Non-Employee Director.

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Exhibit 10.2

ARTICLE III.

ADMINISTRATION

3.1General. The Committee shall have exclusive authority to operate, manage and administer the Plan in accordance with its terms and conditions. Notwithstanding the foregoing, in its absolute discretion, the Board may at any time and from time to time exercise any and all rights, duties and responsibilities of the Committee under the Plan, including establishing procedures to be followed by the Committee, but excluding matters which under any applicable law, regulation or rule, including any exemptive rule under Section 16 of the Exchange Act (including Rule 16b-3), are required to be determined in the sole discretion of the Committee. If and to the extent that the Committee does not exist or cannot function, the Board may take any action under the Plan that would otherwise be the responsibility of the Committee, subject to the limitations set forth in the immediately preceding sentence. Notwithstanding any other provision of the Plan to the contrary, any action or determination specifically affecting or relating to an Award granted to a Non-Employee Director, including under Article XI, shall be taken, or approved or ratified, by the Board or the Governance Committee of the Board.

3.2Committee. The members of the Committee shall be appointed from time to time by, and shall serve at the discretion of, the Board of Directors. The Committee shall consist of not less than three (3) non-employee members of the Board, each of whom satisfies such criteria of independence as the Board may establish and such additional regulatory or listing requirements as the Board may determine to be applicable or appropriate. Appointment of Committee members shall be effective upon their acceptance of such appointment. Committee members may be removed by the Board at any time either with or without cause, and such members may resign at any time by delivering notice thereof to the Board. Any vacancy on the Committee, whether due to action of the Board or any other reason, shall be filled by the Board. The Committee shall keep minutes of its meetings. A majority of the Committee shall constitute a quorum and a majority of a quorum may authorize any action. Any decision reduced to writing and signed by a majority of the members of the Committee shall be fully effective as if it has been made at a meeting duly held.

3.3Authority of the Committee. The Committee shall have full discretionary authority to grant, pursuant to the terms of the Plan, Awards to those individuals who are eligible to receive Awards under the Plan. Except as limited by law or by the Certificate of Incorporation or By-Laws of the Company, and subject to the provisions herein, the Committee shall have full power, in accordance with the other terms and provisions of the Plan, to:

(a)select Employees, Non-Employee Directors and Consultants who may receive Awards under the Plan and become Participants;

(b)determine eligibility for participation in the Plan and decide all questions concerning eligibility for, and the amount of, Awards under the Plan;

(c)determine the sizes and types of Awards;

(d)determine the terms and conditions of Awards, including the Option Prices of Options and the Grant Prices of SARs, provided that, any Award (other than a Cash-Based Award) granted under the Plan shall have a minimum vesting period and/or a minimum Period of Restriction of one (1) year following the grant date of any such Award; provided further that, the foregoing limitations shall apply to 95% of all such Awards granted under the Plan;

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Exhibit 10.2

(e)grant Awards as an alternative to, or as the form of payment for grants or rights earned or payable under, other bonus or compensation plans, arrangements or policies of the Company or a Subsidiary or Affiliate;

(f)grant Substitute Awards on such terms and conditions as the Committee may prescribe, subject to compliance with the ISO rules under Code Section 422 and the nonqualified deferred compensation rules under Code Section 409A, where applicable;

(g)make all determinations under the Plan concerning Termination of any Participant’s employment or service with the Company or a Subsidiary or Affiliate, including whether such Termination occurs by reason of Cause, disability or in connection with a Change of Control and whether a leave constitutes a Termination;

(h)determine whether or not a Change of Control or an Imminent Change of Control shall have occurred and whether or not a Change of Control is a Qualified Change of Control;

(i)construe and interpret the Plan and any agreement or instrument entered into under the Plan, including any Award Agreement;

(j)establish and administer any terms, conditions, restrictions, limitations, forfeiture, vesting or exercise schedule, and other provisions of or relating to any Award;

(k)establish and administer any performance goals in connection with any Awards, including related performance criteria and applicable Performance Periods, and determine the extent to which any performance goals and/or other terms and conditions of an Award are attained or are not attained;

(l)construe any ambiguous provisions, correct any defects, supply any omissions and reconcile any inconsistencies in the Plan and/or any Award Agreement or any other instrument relating to any Awards;

(m)establish, adopt, amend, waive and/or rescind rules, regulations, procedures, guidelines, forms and/or instruments for the Plan’s operation or administration;

(n)make all valuation determinations relating to Awards and the payment or settlement thereof;

(o)grant waivers of terms, conditions, restrictions and limitations under the Plan or applicable to any Award, or accelerate the vesting or exercisability of any Award;

(p)subject to the provisions of Article XVI, amend or adjust the terms and conditions of any outstanding Award and/or adjust the number and/or class of shares of stock subject to any outstanding Award;

(q)at any time and from time to time after the granting of an Award, specify such additional terms, conditions and restrictions with respect to such Award as may be deemed necessary or appropriate to ensure compliance with any and all applicable laws or rules, including terms, restrictions and conditions for compliance with applicable securities laws or listing rules, methods of withholding

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Exhibit 10.2

or providing for the payment of required taxes and restrictions regarding a Participant’s ability to exercise Options through a cashless (broker-assisted) exercise;

(r)determine whether, and to what extent and under what circumstances Awards may be settled in cash, Shares or other property or canceled or suspended; and

(s)exercise all such other authorities, take all such other actions and make all such other determinations as it deems necessary or advisable for the proper operation and/or administration of the Plan.

3.4Award Agreements. The Committee shall, subject to applicable laws and rules, determine the date an Award is granted. Each Award shall be evidenced by an Award Agreement; however, two or more Awards granted to a single Participant may be combined in a single Award Agreement. An Award Agreement shall not be a precondition to the granting of an Award; provided, however, that (a) the Committee may, but need not, require as a condition to any Award Agreement’s effectiveness, that such Award Agreement be executed on behalf of the Company and/or by the Participant to whom the Award evidenced thereby shall have been granted (including by electronic signature or other electronic indication of acceptance), and such executed Award Agreement be delivered to the Company, and (b) no person shall have any rights under any Award unless and until the Participant to whom such Award shall have been granted has complied with the applicable terms and conditions of the Award. The Committee shall prescribe the form of all Award Agreements, and, subject to the terms and conditions of the Plan, shall determine the content of all Award Agreements. Any Award Agreement may be supplemented or amended in writing from time to time as approved by the Committee; provided that the terms and conditions of any such Award Agreement as supplemented or amended are not inconsistent with the provisions of the Plan. In the event of any dispute or discrepancy concerning the terms of an Award, the records of the Committee or its designee shall be determinative.

3.5Discretionary Authority; Decisions Binding. The Committee shall have full discretionary authority in all matters related to the discharge of its responsibilities and the exercise of its authority under the Plan. All determinations, decisions, actions and interpretations by the Committee with respect to the Plan and any Award Agreement, and all related orders and resolutions of the Committee shall be final, conclusive and binding on all Participants, the Company and its shareholders, any Subsidiary or Affiliate and all persons having or claiming to have any right or interest in or under the Plan and/or any Award Agreement. The Committee shall consider such factors as it deems relevant to making or taking such decisions, determinations, actions and interpretations, including the recommendations or advice of any Director or officer or employee of the Company, any director, officer or employee of a Subsidiary or Affiliate and such attorneys, consultants and accountants as the Committee may select. A Participant or other holder of an Award may contest a decision or action by the Committee with respect to such person or Award only on the grounds that such decision or action was arbitrary or capricious or was unlawful, and any review of such decision or action shall be limited to determining whether the Committee’s decision or action was arbitrary or capricious or was unlawful.

3.6Attorneys; Consultants. The Committee may consult with counsel who may be counsel to the Company. The Committee may, with the approval of the Board, employ such other attorneys and/or consultants, accountants, appraisers, brokers, agents and other persons, any of whom may be an Employee, as the Committee deems necessary or appropriate. The Committee, the Company and its officers and Directors shall be entitled to rely upon the advice, opinions or valuations of any such persons. The Committee shall not incur any liability for any action taken in good faith in reliance upon the advice of such counsel or other persons.

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Exhibit 10.2

3.7Delegation of Administration. Except to the extent prohibited by applicable law, including any applicable exemptive rule under Section 16 of the Exchange Act (including Rule 16b-3) or Section 162(m) of the Code, or the applicable rules of a stock exchange, the Committee may, in its discretion, allocate all or any portion of its responsibilities and powers under this Article III to any one or more of its members and/or delegate all or any part of its responsibilities and powers under this Article III to any person or persons selected by it; provided, however, that the Committee may not delegate its authority to correct defects, omissions or inconsistencies in the Plan. Any such authority delegated or allocated by the Committee under this Section 3.7 shall be exercised in accordance with the terms and conditions of the Plan and any rules, regulations or administrative guidelines that may from time to time be established by the Committee, and any such allocation or delegation may be revoked by the Committee at any time.

ARTICLE IV.

SHARES SUBJECT TO THE PLAN AND AWARD LIMITS

4.1Number of Shares Available for Grants. The shares of stock subject to Awards granted under the Plan shall be Shares. Such Shares subject to the Plan may be either authorized and unissued shares (which will not be subject to preemptive rights) or previously issued shares acquired by the Company or any Subsidiary. Subject to adjustment as provided in Section 4.3, the total number of Shares that may be delivered pursuant to Awards under the Plan as of the Effective Date shall be up to a maximum of thirty seven million five hundred thousand (37,500,000 ) Shares (the “Share Reserve”), which represents the sum of (a) sixteen million (16,000,000 ) new Shares authorized under this Plan, plus (b) up to fourteen million (14,000,000 ) Shares that have been approved by the Company’s stockholders for issuance but have not been awarded under the Prior Plan, plus (c) up to seven million five hundred thousand (7,500,000) Shares which are subject to outstanding awards under the Prior Plan which will be available for the grant of Awards under this Plan to the extent such Shares are not issued due to expiration, forfeiture, cancellation, settlement in cash in lieu of Shares or otherwise. For purposes of this Section 4.1, (d) each Share delivered pursuant to an Option shall reduce the Share Reserve by one (1) Share; (e) each Share subject to the exercised portion of a SAR (whether the distribution upon exercise is made in cash, Shares or a combination of cash and Shares) shall reduce the Share Reserve by one (1) Share, otherthan an SAR that, by its terms, from and after the grant date thereof, is payable only in cash, in which case the Share Reserve shall not be reduced; (f) each Share delivered pursuant to a Restricted Stock Unit Award, Performance Share Award, Performance Unit Award, or Other Stock-Based Award shall reduce the Share Reserve by three (3.00) Shares for Awards; (g) each Share delivered pursuant to a Restricted Stock Award without a purchase price, or with a per-Share purchase price lower than one hundred percent (100%) of the Fair Market Value of a Share on the grant date of such Restricted Stock Award, shall reduce the Share Reserve by three (3.00) Shares for Awards; (h) each Share delivered pursuant to a Restricted Stock Award with a per-Share purchase price at least equal to one hundred percent (100%) of the Fair Market Value of a Share on the grant date of such Restricted Stock Award shall reduce the Share Reserve by one (1) Share; and (i) to the extent that a distribution pursuant to an Award is made in cash, otherthan pursuant to an Award that by its terms, from and after the grant date thereof, is payable only in cash, the Share Reserve shall be reduced by the number of Shares subject to the redeemed, paid or exercised portion of such Award. Subject to the immediately preceding sentence and, in the case of ISOs, any limitations applicable thereto under the Code, any Shares that are subject to an Option, SAR, or other Award which for any reason expires or is terminated or canceled without having been fully exercised or satisfied, and any Shares that are subject to any Restricted Stock Award (including any Shares subject to a Participant’s Restricted Stock Award that are repurchased by the Company at the Participant’s cost), Restricted Stock Unit Award or other Award granted under the Plan which are forfeited, shall, to the extent of any such expiration, termination, cancellation or forfeiture, be available for delivery in connection with future Awards under the Plan. However, notwithstanding any other provisions of this Section 4.1 to the contrary, (i) Shares withheld or tendered to pay the exercise price or withholding taxes with respect to an outstanding Award or an outstanding award under the Prior Plan shall not again be made available for issuance pursuant to Awards under the Plan, and (ii) the payment of cash dividends or Dividend Equivalents in cash in connection with Awards shall not reduce the Share Reserve. Any Shares delivered under the Plan upon exercise or satisfaction of Substitute Awards shall not reduce the Shares available for delivery under the Plan; provided, however, that the total number of Shares that may be delivered pursuant to Incentive Stock Options granted under the Plan shall be equal to sixteen million (16,000,000) Shares, as adjusted pursuant to this Section 4.1, but without application of the foregoing

11

Exhibit 10.2

provisions of this sentence. The Prior Plan will remain in effect until the Effective Date. From and after Effective Date, no further grants or awards will be made under the Prior Plan; however, grants or awards made under the Prior Plan before the Effective Date shall continue in effect in accordance with their terms.

4.2Award Limits for Non-Employee Directors. The maximum aggregate grant with respect to Awards made in any Fiscal Year to any Non-Employee Director shall not exceed one million ($1,000,000) dollars in value, based on the combined grant-date fair value (as determined in accordance with ASC Topic 718, the “Fair Value”) of each Award and the grant-date Fair Value of each Option or SAR that is granted during such Fiscal Year.

4.3Adjustments in Authorized Shares. In the event of any corporate event or transaction (including a change in the Shares or the capitalization of the Company), such as a reclassification, recapitalization, merger, consolidation, reorganization (whether or not such reorganization comes within the definition of such term in Section 368 of the Code), issuance of warrants or rights, dividend or other distribution (whether in the form of cash, stock or other property), stock split or reverse stock split, spin-off, split-up, combination or exchange of shares, repurchase of shares, or other like change in corporate structure, partial or complete liquidation of the Company or distribution (other than normal cash dividends) to shareholders of the Company, or any similar corporate event or transaction, the Committee, in order to prevent dilution or enlargement of Participants’ rights under the Plan, shall substitute or adjust, as applicable, the number, class and kind of securities which may be delivered under Section 4.1; the number, class and kind, and/or price (such as the Option Price of Options or the Grant Price of SARs) of securities subject to outstanding Awards; the Award limits set forth in Section 4.2; and other value determinations applicable to outstanding Awards; provided, however that the number of Shares subject to any Award shall always be a whole number. The Committee shall also make appropriate adjustments and modifications in the terms of any outstanding Awards to reflect or related to any such events, adjustments, substitutions or changes, including modifications of performance goals and changes in the length of Performance Periods. Any adjustment, substitution or change pursuant to this Section 4.3 made with respect to an Award intended to be an Incentive Stock Option shall be made only to the extent consistent with such intent, unless the Committee determines otherwise. The Committee will provide that the Fair Value of any substituted or adjusted Award as and at the time of substitution or adjustment shall not exceed the Fair Value of such Award immediately prior to substitution or adjustment unless the Committee determines otherwise or as required by Code Section 409A or Code Section 422. The Committee shall not make any adjustment pursuant to this Section 4.3 that would cause an Award that is otherwise exempt from Code Section 409A to become subject to Code Section 409A, or that would cause an Award that is subject to Code Section 409A to fail to satisfy the requirements of Code Section 409A. All determinations of the Committee as to adjustments or changes under this Section 4.3 shall be conclusive and binding on the Participants.

4.4No Limitation on Corporate Actions. The existence of the Plan and any Awards granted hereunder shall not affect in any way the right or power of the Company, any Subsidiary or any Affiliate to make or authorize any adjustment, recapitalization, reorganization or other change in its capital structure or business structure, any merger or consolidation, any issuance of debt, preferred or prior preference stock ahead of or affecting the Shares, additional shares of capital stock or other securities or subscription rights thereto, any dissolution or liquidation, any sale or transfer of all or part of its assets or business or any other corporate act or proceeding. Further, except as expressly provided herein or by the Committee, (I) the issuance by the Company of Shares or any class of securities convertible into shares of stock of any class, for cash, property, labor or services, upon direct sale, upon the exercise of rights or warrants to subscribe therefor, or upon conversion of shares or obligations of the Company convertible into such shares or other securities, (ii) the payment of a dividend in property other than Shares, (iii) the occurrence of any capital change described in Section 4.3 or (iv) the occurrence of any similar transaction, and in any case whether or not for fair value, shall not affect, and no adjustment by reason thereof shall be made with respect to, the number of Shares subject to Awards theretofore granted or the Option Price, Grant Price or purchase price per share applicable to any Award, unless the Committee shall determine, in its discretion, that an adjustment is necessary or appropriate.

12

Exhibit 10.2

ARTICLE V.

ELIGIBILITY AND PARTICIPATION

5.1Eligibility. Employees, Non-Employee Directors and Consultants shall be eligible to become Participants and receive Awards in accordance with the terms and conditions of the Plan, subject to the limitations on the granting of ISOs set forth in Section 6.9(a).

5.2Actual Participation. Subject to the provisions of the Plan, the Committee may, from time to time, select Participants from all eligible Employees, Non-Employee Directors and Consultants and shall determine the nature and amount of each Award.

ARTICLE VI.

STOCK OPTIONS

6.1Grant of Options. Subject to the terms and provisions of the Plan, Options may be granted to Participants in such number, and upon such terms, and at any time and from time to time as shall be determined by the Committee. The Committee may grant an Option or provide for the grant of an Option, either from time to time in the discretion of the Committee or automatically upon the occurrence of specified events, including the achievement of performance goals, the satisfaction of an event or condition within the control of the recipient of the Option or within the control of others. The granting of an Option shall take place when the Committee by resolution, written consent or other appropriate action determines to grant such Option for a particular number of Shares to a particular Participant at a particular Option Price.

6.2Award Agreement. Each Option grant shall be evidenced by an Award Agreement that shall specify the Option Price, the maximum duration of the Option, the number of Shares to which the Option pertains, the conditions upon which the Option shall become exercisable and such other provisions as the Committee shall determine, which are not inconsistent with the terms of the Plan. The Award Agreement also shall specify whether the Option is intended to be an ISO or an NQSO. To the extent that any Option does not qualify as an ISO (whether because of its provisions or the time or manner of its exercise or otherwise), such Option, or the portion thereof which does not so qualify, shall constitute a separate NQSO.

6.3Option Price. The Option Price for each Option shall be determined by the Committee and set forth in the Award Agreement; provided that, subject to Section 6.9(c), the Option Price of an Option shall be not less than one hundred percent (100%) of the Fair Market Value of a Share on the date the Option is granted; providedfurther, that Substitute Awards or Awards granted in connection with an adjustment provided for in Section 4.3, in the form of stock options, shall have an Option Price per Share that is intended to maintain the economic value of the Award that was replaced or adjusted, as determined by the Committee.

13

Exhibit 10.2

6.4Duration of Options. Each Option granted to a Participant shall expire at such time as the Committee shall determine at the time of grant and set forth in the Award Agreement; provided, however, that no Option shall be exercisable later than the tenth (10^th) anniversary of its date of grant, subject to the respective last sentences of Sections 6.5 and 6.9(c).

6.5Exercise of Options. Options shall be exercisable at such times and be subject to such restrictions and conditions as the Committee shall in each instance determine and set forth in the Award Agreement, which need not be the same for each grant or for each Option or Participant. An Agreement may provide that the period of time over which an Option other than an ISO may be exercised shall be automatically extended if on the scheduled expiration date of such Option the Optionee’s exercise of such Option would violate applicable securities laws; provided, however, that during such extended exercise period the Option may only be exercised to the extent the Option was exercisable in accordance with its terms immediately prior to such scheduled expiration date; providedfurther, however, that such extended exercise period shall end not later than thirty (30) days after the exercise of such Option first would no longer violate such laws.

6.6Payment. Options shall be exercised by the delivery of a written notice of exercise to the Company, in a form specified or accepted by the Committee, or by complying with any alternative exercise procedures that may be authorized by the Committee, setting forth the number of Shares with respect to which the Option is to be exercised, accompanied by full payment for such Shares, which shall include applicable taxes, if any, in accordance with Article XVII. The Option Price upon exercise of any Option shall be payable to the Company in full either: (a) in cash or its equivalent; (b) subject to such terms, conditions and limitations as the Committee may prescribe, by tendering (either by actual delivery or attestation) unencumbered Shares previously acquired by the Participant exercising such Option having an aggregate Fair Market Value at the time of exercise equal to the total Option Price, (c) by a combination of (a) and (b); or (d) by any other method approved or accepted by the Committee in its sole discretion, including, if the Committee so determines, a cashless (broker-assisted) exercise that complies with all applicable laws. Subject to any governing rules or regulations, as soon as practicable after receipt of a written notification of exercise and full payment in accordance with the preceding provisions of this Section 6.6, the Company shall deliver to the Participant exercising an Option, in the Participant’s name, evidence of book entry Shares, or, upon the Participant’s request, Share certificates, in an appropriate amount based upon the number of Shares purchased under the Option, subject to Section 20.9. Unless otherwise determined by the Committee, all payments under all of the methods described above shall be paid in United States dollars.

6.7Rights as a Shareholder. No Participant or other person shall become the beneficial owner of any Shares subject to an Option, nor have any rights to dividends or other rights of a shareholder with respect to any such Shares, until the Participant has actually received such Shares following exercise of his or her Option in accordance with the provisions of the Plan and the applicable Award Agreement.

6.8Termination of Employment or Service. Except as otherwise provided in the Award Agreement, an Option may be exercised only to the extent that it is then exercisable, and if at all times during the period beginning with the date of granting of such Option and ending on the date of exercise of such Option the Participant is an Employee or Non-Employee Director, and shall terminate immediately upon a Termination of the Participant. An Option shall cease to become newly exercisable upon a Termination of the holder thereof. Notwithstanding the foregoing provisions of this Section 6.8 to the contrary, the Committee may determine in its discretion that an Option may be exercised following any such Termination, whether or not exercisable at the time of such Termination; provided, however, that in no event may an Option be exercised after the expiration date of such Option specified in the applicable Award Agreement, except as provided in the last sentence of Section 6.5.

14

Exhibit 10.2

6.9Limitations on Incentive Stock Options.

(a)General. No ISO shall be granted to any individual otherwise eligible to participate in the Plan who is not an Employee of the Company or a Subsidiary on the date of granting of such Option. Any ISO granted under the Plan shall contain such terms and conditions, consistent with the Plan, as the Committee may determine to be necessary to qualify such Option as an “incentive stock option” under Section 422 of the Code. Any ISO granted under the Plan may be modified by the Committee to disqualify such Option from treatment as an “incentive stock option” under Section 422 of the Code.

(b)$100,000 Per Year Limitation. Notwithstanding any intent to grant ISOs, an Option granted under the Plan will not be considered an ISO to the extent that it, together with any other “incentive stock options” (within the meaning of Section 422 of the Code, but without regard to subsection (d) of such Section) under the Plan and any other “incentive stock option” plans of the Company, any Subsidiary and any “parent corporation” of the Company within the meaning of Section 424(e) of the Code, are exercisable for the first time by any Participant during any calendar year with respect to Shares having an aggregate Fair Market Value in excess of $100,000 (or such other limit as may be required by the Code) as of the time the Option with respect to such Shares is granted. The rule set forth in the preceding sentence shall be applied by taking Options into account in the order in which they were granted.

(c)Options Granted to Certain Shareholders. No ISO shall be granted to an individual otherwise eligible to participate in the Plan who owns (within the meaning of Section 424(d) of the Code), at the time the Option is granted, more than ten percent (10%) of the total combined voting power of all classes of stock of the Company or a Subsidiary or any “parent corporation” of the Company within the meaning of Section 424(e) of the Code. This restriction does not apply if at the time such ISO is granted the Option Price of the ISO is at least 110% of the Fair Market Value of a Share on the date such ISO is granted, and the ISO by its terms is not exercisable after the expiration of five years from such date of grant.

ARTICLE VII.

STOCK APPRECIATION RIGHTS

7.1Grant of SARs. Subject to the terms and conditions of the Plan, SARs may be granted to Participants at any time and from time to time as shall be determined by the Committee. The Committee may grant an SAR (a) in connection and simultaneously with the grant of an Option (a Tandem SAR) or (b) independent of, and unrelated to, an Option (a Freestanding SAR). The Committee shall have complete discretion in determining the number of Shares to which a SAR pertains (subject to Article IV) and, consistent with the provisions of the Plan, in determining the terms and conditions pertaining to any SAR.

7.2Grant Price. The Grant Price for each SAR shall be determined by the Committee and set forth in the Award Agreement, subject to the limitations of this Section 7.2. The Grant Price for each Freestanding SAR shall be not less than one hundred percent (100%) of the Fair Market Value of a Share on the date such Freestanding SAR is granted, except in the case of Substitute Awards or Awards granted in connection with an adjustment provided for in Section 4.3. The Grant Price of a Tandem SAR shall be equal to the Option Price of the related Option.

15

Exhibit 10.2

7.3Exercise of Tandem SARs. Tandem SARs may be exercised for all or part of the Shares subject to the related Option upon the surrender of the right to exercise the equivalent portion of the related Option. A Tandem SAR shall be exercisable only when and to the extent the related Option is exercisable and may be exercised only with respect to the Shares for which the related Option is then exercisable. A Tandem SAR shall entitle a Participant to elect, in the manner set forth in the Plan and the applicable Award Agreement, in lieu of exercising his or her unexercised related Option for all or a portion of the Shares for which such Option is then exercisable pursuant to its terms, to surrender such Option to the Company with respect to any or all of such Shares and to receive from the Company in exchange therefor a payment described in Section 7.7. An Option with respect to which a Participant has elected to exercise a Tandem SAR shall, to the extent of the Shares covered by such exercise, be canceled automatically and surrendered to the Company. Such Option shall thereafter remain exercisable according to its terms only with respect to the number of Shares as to which it would otherwise be exercisable, less the number of Shares with respect to which such Tandem SAR has been so exercised. Notwithstanding any other provision of the Plan to the contrary, with respect to a Tandem SAR granted in connection with an ISO: (a) the Tandem SAR will expire no later than the expiration of the related ISO; (b) the value of the payment with respect to the Tandem SAR may not exceed the difference between the Fair Market Value of the Shares subject to the related ISO at the time the Tandem SAR is exercised and the Option Price of the related ISO; and (c) the Tandem SAR may be exercised only when the Fair Market Value of the Shares subject to the ISO exceeds the Option Price of the ISO.

7.4Exercise of Freestanding SARs. Freestanding SARs may be exercised upon whatever terms and conditions the Committee, in its sole discretion, in accordance with the Plan, determines and sets forth in the Award Agreement.

7.5Award Agreement. Each SAR grant shall be evidenced by an Award Agreement that shall specify the number of Shares to which the SAR pertains, the Grant Price, the term of the SAR, and such other terms and conditions as the Committee shall determine in accordance with the Plan.

7.6Term of SARs. The term of a SAR granted under the Plan shall be determined by the Committee, in its sole discretion; provided, however, that the term of any Tandem SAR shall be the same as the related Option and no SAR shall be exercisable more than ten (10) years after it is granted, subject to the last sentence of Section 6.5 in the case of a Tandem SAR.

7.7Payment of SAR Amount. An election to exercise SARs shall be deemed to have been made on the date of Notice of such election to the Company. Upon exercise of a SAR, a Participant shall be entitled to receive payment from the Company in an amount determined by multiplying:

(a)The excess of the Fair Market Value of a Share on the date of exercise over the Grant Price of the SAR; by

(b)The number of Shares with respect to which the SAR is exercised.

Notwithstanding the foregoing provisions of this Section 7.7 to the contrary, the Committee may establish and set forth in the applicable Award Agreement a maximum amount per Share that will be payable upon the exercise of a SAR. At the discretion of the Committee, such payment upon exercise of a SAR shall be in cash, in Shares of equivalent Fair Market Value, or in some combination thereof.

7.8Rights as a Shareholder. A Participant receiving a SAR shall have the rights of a Shareholder only as to Shares, if any, actually issued to such Participant upon satisfaction or achievement of the terms and conditions of the Award, and in accordance with the provisions of the Plan and the applicable Award Agreement, and not with respect to Shares to which such Award relates but which are not actually issued to such Participant.

16

Exhibit 10.2

7.9Termination of Employment or Service. Each SAR Award Agreement shall set forth the extent to which the Participant shall have the right to exercise the SAR following such Participant’s Termination. Such provisions shall be determined in the sole discretion of the Committee, need not be uniform among all SARs issued pursuant to the Plan, and may reflect distinctions based on the reasons for Termination.

ARTICLE VIII.

RESTRICTED STOCK AND RESTRICTED STOCK UNITS

8.1Awards of Restricted Stock and Restricted Stock Units. Subject to the terms and provisions of the Plan, the Committee, at any time and from time to time, may grant Shares of Restricted Stock and/or Restricted Stock Units to Participants in such amounts as the Committee shall determine. Subject to the terms and conditions of this Article VIII and the Award Agreement, upon delivery of Shares of Restricted Stock to a Participant, or creation of a book entry evidencing a Participant’s ownership of Shares of Restricted Stock, pursuant to Section 8.6, the Participant shall have all of the rights of a shareholder with respect to such Shares, subject to the terms and restrictions set forth in this Article VIII or the applicable Award Agreement or as determined by the Committee. Restricted Stock Units shall be similar to Restricted Stock, except no Shares are actually awarded to a Participant who is granted Restricted Stock Units on the date of grant, and such Participant shall have no rights of a shareholder with respect to such Restricted Stock Units.

8.2Award Agreement. Each Restricted Stock and/or Restricted Stock Unit Award shall be evidenced by an Award Agreement that shall specify the Period of Restriction, the number of Shares of Restricted Stock or the number of Restricted Stock Units granted, and such other provisions as the Committee shall determine in accordance with the Plan.

8.3Nontransferability of Restricted Stock. Except as provided in this Article VIII, Shares of Restricted Stock may not be sold, transferred, pledged, assigned, encumbered, alienated, hypothecated or otherwise disposed of until the end of the applicable Period of Restriction established by the Committee and specified in the Restricted Stock Award Agreement.

8.4Period of Restriction and Other Restrictions. The Period of Restriction shall lapse based on continuing service as a Non-Employee Director or Consultant or continuing employment with the Company, a Subsidiary or an Affiliate, the achievement of performance goals, the satisfaction of other conditions or restrictions or upon the occurrence of other events, in each case, as determined by the Committee, at its discretion, and stated in the Award Agreement.

8.5Delivery of Shares, Payment of Restricted Stock Units. Subject to Section 20.9, after the last day of the Period of Restriction applicable to a Participant’s Shares of Restricted Stock, and after all conditions and restrictions applicable to such Shares of Restricted Stock have been satisfied or lapse (including satisfaction of any applicable withholding tax obligations), pursuant to the applicable Award Agreement, such Shares of Restricted Stock shall become freely transferable by such Participant. After the last day of the Period of Restriction applicable to a Participant’s Restricted Stock Units, and after all conditions and restrictions applicable to Restricted Stock Units have been satisfied or lapse (including satisfaction of any applicable withholding tax obligations), pursuant to the applicable Award Agreement, such Restricted Stock Units shall be settled by delivery of Shares, a cash payment determined by reference to the then-current Fair Market Value of Shares or a combination of Shares and such cash payment, as the Committee, in its sole discretion, shall determine, either by the terms of the Award Agreement or otherwise.

17

Exhibit 10.2

8.6Forms of Restricted Stock Awards. Each Participant who receives an Award of Shares of Restricted Stock shall be issued a stock certificate or certificates evidencing the Shares covered by such Award registered in the name of such Participant, which certificate or certificates may contain an appropriate legend. The Committee may require a Participant who receives a certificate or certificates evidencing a Restricted Stock Award to immediately deposit such certificate or certificates, together with a stock power or other appropriate instrument of transfer, endorsed in blank by the Participant, with signatures guaranteed in accordance with the Exchange Act if required by the Committee, with the Secretary of the Company or an escrow holder as provided in the immediately following sentence. The Secretary of the Company or such escrow holder as the Committee may appoint shall retain physical custody of each certificate representing a Restricted Stock Award until the Period of Restriction and any other restrictions imposed by the Committee or under the Award Agreement with respect to the Shares evidenced by such certificate expire or shall have been removed. The foregoing to the contrary notwithstanding, the Committee may, in its discretion, provide that a Participant’s ownership of Shares of Restricted Stock prior to the lapse of the Period of Restriction or any other applicable restrictions shall, in lieu of such certificates, be evidenced by a “book entry” (i.e., a computerized or manual entry) in the records of the Company or its designated agent in the name of the Participant who has received such Award. Such records of the Company or such agent shall, absent manifest error, be binding on all Participants who receive Restricted Stock Awards evidenced in such manner. The holding of Shares of Restricted Stock by the Company or such an escrow holder, or the use of book entries to evidence the ownership of Shares of Restricted Stock, in accordance with this Section 8.6, shall not affect the rights of Participants as owners of the Shares of Restricted Stock awarded to them, nor affect the restrictions applicable to such shares under the Award Agreement or the Plan, including the Period of Restriction.

8.7Voting Rights. Unless otherwise determined by the Committee and set forth in a Participant’s Award Agreement, to the extent permitted or required by law, as determined by the Committee, Participants holding Shares of Restricted Stock may be granted the right to exercise full voting rights with respect to those Shares during the Period of Restriction. A Participant shall have no voting rights with respect to any Restricted Stock Units.

8.8Dividends and Other Distributions. During the Period of Restriction, Participants holding Shares of Restricted Stock shall be credited with any cash dividends paid with respect to such Shares while they are so held, unless determined otherwise by the Committee and set forth in the Award Agreement. The Committee may apply any restrictions to such dividends that the Committee deems appropriate, provided that any such cash dividends shall be subject to the same terms and conditions, including the Period of Restriction, any vesting restrictions and, if applicable, the achievement of any performance goals, as relate to the original Shares of Restricted Stock. In addition, in the event of (a) any adjustment as provided in Section 4.3, or (b) any shares or securities are received as a dividend, or an extraordinary dividend is paid in cash, on Shares of Restricted Stock, any new or additional Shares or securities or any extraordinary dividends paid in cash received by a recipient of Restricted Stock shall be subject to the same terms and conditions, including the Period of Restriction, any vesting restrictions and, if applicable, the achievement of any performance goals, as relate to the original Shares of Restricted Stock. No dividends will be credited or paid with respect to any Award other than Restricted Stock, provided that Awards other than Restricted Stock may be granted Dividend Equivalents in accordance with Section 12.1 hereof.

8.9Termination of Employment or Service. Except as otherwise provided in this Section 8.9, during the Period of Restriction, any Restricted Stock Units and/or Shares of Restricted Stock held by a Participant shall be forfeited and revert to the Company (or, if Shares of Restricted Sock were sold to the Participant, the Participant shall be required to resell such Shares to the Company at cost) upon the Participant’s Termination or the failure to meet or satisfy any applicable performance goals or other terms, conditions and restrictions to the extent set forth in the applicable Award Agreement. Each applicable Award Agreement shall set forth the extent to which, if any, the Participant shall have the right to retain Restricted Stock Units and/or Shares of Restricted Stock following such Participant’s Termination. Such provisions shall be determined in the sole discretion of the Committee, shall be included in the applicable Award Agreement, need not be uniform among all such Awards issued pursuant to the Plan, and may reflect distinctions based on the reasons for, or circumstances of, such Termination.

18

Exhibit 10.2

8.10Compliance With Section 409A. Unless the Committee provides otherwise in an Award Agreement, each Restricted Stock Unit shall be paid in full to the Participant no later than the fifteenth day of the third month after the end of the first calendar year in which the Restricted Stock Unit is no longer subject to a “substantial risk of forfeiture” within the meaning of Code Section 409A. If the Committee provides in an Award Agreement that a Restricted Stock Unit is intended to be subject to Code Section 409A, the Award Agreement shall include terms that are intended to satisfy the requirements of Section 409A.

ARTICLE IX.

PERFORMANCE UNITS, PERFORMANCE SHARES, AND CASH-BASED AWARDS

9.1Grant of Performance Units, Performance Shares and Cash-Based Awards. Subject to the terms of the Plan, Performance Units, Performance Shares, and/or Cash-Based Awards may be granted to Participants in such amounts and upon such terms, and at any time and from time to time, as shall be determined by the Committee, in accordance with the Plan. A Performance Unit, Performance Share or Cash-Based Award entitles the Participant who receives such Award to receive Shares or cash upon the attainment of performance goals and/or satisfaction of other terms and conditions determined by the Committee when the Award is granted. Such entitlements of a Participant with respect to his or her outstanding Performance Unit, Performance Share or Cash-Based Award shall be reflected by a bookkeeping entry in the records of the Company, unless otherwise provided by the Award Agreement. The terms and conditions of such Awards shall be consistent with the Plan and need not be uniform among all such Awards or all Participants receiving such Awards.

9.2Value of Performance Units, Performance Shares and Cash-Based Awards. Each Performance Unit shall have an initial value that is established by the Committee at the time of grant. Each Performance Share shall have an initial value equal to the Fair Market Value of a Share on the date of grant. Each Cash-Based Award shall have a value as shall be determined by the Committee. The Committee shall set performance goals in its discretion which, depending on the extent to which they are met, will determine the number and/or value of Performance Units and Performance Shares and Cash-Based Awards that will be paid out to the Participant.

9.3Earning of Performance Units, Performance Shares and Cash-Based Awards. Subject to the terms of the Plan, after the applicable Performance Period has ended, the holder of Performance Units, Performance Shares or Cash-Based Awards shall be entitled to receive payment on the number and value of Performance Units, Performance Shares or Cash-Based Awards earned by the Participant over the Performance Period, to be determined as a function of the extent to which the corresponding performance goals and/or other terms and conditions have been achieved or satisfied. The Committee shall determine the extent to which any such pre-established performance goals and/or other terms and conditions of a Performance Unit, Performance Share or Cash-Based Award are attained or not attained following conclusion of the applicable Performance Period. The Committee may, in its discretion, waive any such performance goals and/or other terms and conditions relating to any such Award.

9.4Form and Timing of Payment of Performance Units, Performance Shares and Cash-Based Awards. Payment of earned Performance Units, Performance Shares and Cash-Based Awards shall be as determined by the Committee and as set forth in the Award Agreement. Subject to the terms of the Plan, the Committee, in its sole discretion, may pay earned Performance Units, Performance Shares and Cash-Based Awards in the form of cash or in Shares (or in a combination thereof) which have an aggregate Fair Market Value equal to the value of the earned Performance Units, Performance Shares or Cash-Based Awards as soon as practicable after the end of the Performance Period and following the Committee’s determination of actual performance against the performance goals and/or other terms and conditions established by the Committee. Such Shares may be granted subject to any restrictions imposed

19

Exhibit 10.2

by the Committee, including pursuant to Section 20.9. The determination of the Committee with respect to the form of payment of such Awards shall be set forth in the Award Agreement pertaining to the grant of the Award.

9.5Rights as a Shareholder. A Participant receiving a Performance Unit, Performance Share or Cash-Based Award shall have the rights of a shareholder only as to Shares, if any, actually received by the Participant upon satisfaction or achievement of the terms and conditions of such Award and not with respect to Shares subject to the Award but not actually issued to such Participant.

9.6Termination of Employment or Service. Each Award Agreement shall set forth the extent to which the Participant shall have the right to retain Performance Units, Performance Shares and/or Cash-Based Award following such Participant’s Termination. Such provisions shall be determined in the sole discretion of the Committee, shall be included in the applicable Award Agreement, need not be uniform among all such Awards issued pursuant to the Plan, and may reflect distinctions based on the reasons for Termination.

9.7Compliance With Section 409A. Unless the Committee provides otherwise in an Award Agreement, each Performance Unit, Performance Share and/or Cash-Based Award shall be paid in full to the Participant no later than the fifteenth day of the third month after the end of the first calendar year in which such Award is no longer subject to a “substantial risk of forfeiture” within the meaning of Code Section 409A. If the Committee provides in an Award Agreement that a Performance Share, Performance Unit or Cash-Based Award is intended to be subject to Code Section 409A, the Award Agreement shall include terms that are intended to satisfy the requirements of Section 409A.

ARTICLE X.

OTHER STOCK-BASED AWARDS

10.1Other Stock-Based Awards. The Committee may grant types of equity-based or equity-related Awards not otherwise described by the terms of the Plan (including the grant or offer for sale of unrestricted Shares), in such amounts (subject to Article IV) and subject to such terms and conditions, as the Committee shall determine. Such Other Stock-Based Awards may involve the transfer of actual Shares to Participants, or payment in cash or otherwise of amounts based on the value of Shares and may include Awards designed to comply with or take advantage of the applicable local laws of jurisdictions other than the United States.

10.2Value of Other Stock-Based Awards. Each Other Stock-Based Award shall be expressed in terms of Shares or units based on Shares, as determined by the Committee. The Committee may establish performance goals in its discretion, and any such performance goals shall be set forth in the applicable Award Agreement. If the Committee exercises its discretion to establish performance goals, the number and/or value of Other Stock-Based Awards that will be paid out to the Participant will depend on the extent to which such performance goals are met.

10.3Payment of Other Stock-Based Awards. Payment, if any, with respect to an Other Stock-Based Award shall be made in accordance with the terms of the Award, as set forth in the Award Agreement, in cash or Shares as the Committee determines.

20

Exhibit 10.2

10.4Termination of Employment or Service. The Committee shall determine the extent to which the Participant shall have the right to receive Other Stock-Based Awards following the Participant’s Termination. Such provisions shall be determined in the sole discretion of the Committee, such provisions may be included in the applicable Award Agreement, but need not be uniform among all Other Stock-Based Awards issued pursuant to the Plan, and may reflect distinctions based on the reasons for Termination.

10.5Compliance With Section 409A. Unless the Committee provides otherwise in an Award Agreement, each Other Stock-Based Award shall be paid in full to the Participant no later than the fifteenth day of the third month after the end of the first calendar year in which the Other Stock-Based Award is no longer subject to a “substantial risk of forfeiture” within the meaning of Code Section 409A. If the Committee provides in an Award Agreement that a Cash-Based Award or Other Stock-Based Award is intended to be subject to Code Section 409A, the Award Agreement shall include terms that are intended to satisfy the requirements of Section 409A.

ARTICLE XI.

NON-EMPLOYEE DIRECTOR FEES IN SHARES OR OTHER AWARDS

11.1Payment of Fees in Shares or Other Awards. The Board may determine to pay a Non-Employee Director up to 100% of his or her Fees as an Other Stock-Based Award denominated in Shares, or another type of Award, or otherwise make Awards in lieu of all or any portion of his or her Fees. Except as otherwise provided in this Article XI, the percentage of Fees to be paid in such Shares or other Awards to Non-Employee Directors, or the amount of an Award in lieu of Fees, during each calendar quarter shall be determined by the Board on or prior to the first day of such quarter. If such an Award to be issued as Fees is based on a percentage of such Fees, the number of Shares subject to such Award shall be determined by multiplying such percentage by the amount of such Fees otherwise payable in cash for such quarter and dividing the product by the Fair Market Value of the Shares on the first day of such quarter. If this formula produces a fractional Share, the Non-Employee Director shall be paid in cash the Fair Market Value of the fractional Share.

11.2Election to Receive Fees in Shares or Other Awards. To the extent permitted by the Board, a Non-Employee Director may elect to receive up to 100% of his or her Fees (not otherwise payable in Shares or any other Award pursuant to Section 11.1) as an Other Stock-Based Award denominated in Shares or another type of Award, or otherwise elect to receive an Award in lieu of all or any portion of his or her Fees (not otherwise payable in Shares or any other Award pursuant to Section 11.1) (a “Stock Election”). A Stock Election must be in writing and shall be delivered to the Corporate Secretary of the Company prior to the Annual Meeting. Except as provided in this Article XI, such a Stock Election shall apply to Fees payable to the Non-Employee Director in respect of Board and/or committee service during the period commencing on the date of such Annual Meeting and ending on the day before the next Annual Meeting, and a Non-Employee Director may revoke a Stock Election by delivering written notice of such revocation to the Corporate Secretary of the Company prior to the last day of any calendar quarter with respect to all calendar quarters beginning after delivery of such notice of revocation. A Stock Election may specify the applicable percentage of the Fees that the Non-Employee Director wishes to receive in Shares or other applicable Award (the “Designated Percentage”). If a Stock Election specifying a Designated Percentage is made, then not later than the first day of the applicable calendar quarter, the number of Shares subject to the Award to be issued in lieu of the Non-Employee Director’s Fees pursuant to such Stock Election shall be determined by multiplying the Designated Percentage by the amount of Fees otherwise payable in cash for such quarter and dividing that product by the Fair Market Value of the Shares on the first day of such quarter. If this formula produces a fractional Share, the Non-Employee Director shall be paid in cash the Fair Market Value of the fractional Share.

21

Exhibit 10.2

11.3Timing of Determinations or Elections. If required by the Board, determinations or elections concerning the percentage of Fees payable in Awards other than Shares, or the amount of any such Awards payable in lieu of Fees, shall be made prior to the commencement of the calendar year in which an Non-Employee Director performs the services to which such Fees relate, and any such determination or election shall be irrevocable with respect to such Fees for services performed during such calendar year.

ARTICLE XII.

DIVIDEND EQUIVALENTS

12.1Dividend Equivalents. Unless otherwise provided by the Committee, no adjustment shall be made in the Shares issuable or taken into account under Awards on account of cash dividends that may be paid or other rights that may be issued to the holders of Shares prior to issuance of such Shares under such Award. The Committee may grant Dividend Equivalents based on the dividends declared on Shares that are subject to any Award, including any Award the payment or settlement of which is deferred pursuant to Section 20.6. The Committee may also grant Dividend Equivalents based on the dividends that would have been declared on Restricted Stock Units or Performance Units had such Units been Shares of Restricted Stock or Performance Units, as the case may be. Dividend Equivalents may be credited as of the dividend payment dates, during the period between the date the Award is granted and the date the Award becomes payable, terminates or expires. Dividend Equivalents may be subject to any limitations and/or restrictions determined by the Committee. Dividend Equivalents shall be converted to cash or additional Shares by such formula and at such time, and shall be paid at such times, as may be determined by the Committee. Unless the Award Agreement provides otherwise, Dividend Equivalents shall be paid to the Participant at least annually, not later than the fifteenth day of the third month following the end of the calendar year in which the Dividend Equivalents are credited (or, if later, the fifteenth day of the third month following the end of the calendar year in which the Dividend Equivalents are no longer subject to a substantial risk of forfeiture within the meaning of Code Section 409A). Any Dividend Equivalents that are accumulated and paid after the date specified in the preceding sentence shall be explicitly set forth in a separate arrangement that provides for the payment of the dividend equivalents at a time and in a manner that satisfies the requirements of Code Section 409A. No Dividend Equivalents shall relate to Shares underlying an Option or SAR unless such Dividend Equivalent rights are explicitly set forth as a separate arrangement and do not cause any such Option or SAR to be subject to Code Section 409A. Notwithstanding anything in this Section 12.1 to the contrary, no Dividend Equivalents shall be paid on any portion of any Award under the Plan that is not vested, or, in the event that payment or settlement of an Award is contingent on achievement of performance goals, for which the performance goals have not been achieved.

ARTICLE XIII.

TRANSFERABILITY OF AWARDS

13.1Transferability of Incentive Stock Options. No ISO or Tandem SAR granted in connection with an ISO may be sold, transferred, pledged, assigned, or otherwise alienated or hypothecated, other than by will or by the laws of descent and distribution. Further, all ISOs and Tandem SARs granted in connection with ISOs granted to a Participant shall be exercisable during his or her lifetime only by such Participant.

13.2All Other Awards. Except as otherwise provided in Section 8.5 or a Participant’s Award Agreement or otherwise determined at any time by the Committee, no Award granted under the Plan may be sold, transferred, pledged, assigned, or otherwise alienated or hypothecated, other than by will or by the laws of descent and distribution; provided that the Committee may permit further transferability, on a general or a specific basis, and may impose conditions and limitations on any permitted transferability, subject to Section 13.1 and any applicable Period of Restriction; provided further, however, that no Award may be transferred for value or other consideration without first obtaining approval thereof by the shareholders of the Company. Further, except as otherwise provided

22

Exhibit 10.2

in a Participant’s Award Agreement or otherwise determined at any time by the Committee, or unless the Committee decides to permit further transferability, subject to Section 13.1 and any applicable Period of Restriction, all Awards granted to a Participant under the Plan, and all rights with respect to such Awards, shall be exercisable or available during his or her lifetime only by or to such Participant. With respect to those Awards, if any, that are permitted to be transferred to another individual, references in the Plan to exercise or payment related to such Awards by or to the Participant shall be deemed to include, as determined by the Committee, the Participant’s permitted transferee. A Participant’s unexercised Option or SAR, or amounts due but remaining unpaid to such Participant, at the Participant’s death, shall be exercised or paid as designated by the Participant by will or by the laws of descent and distribution. In the event any Award is exercised by or otherwise paid to the executors, administrators, heirs or distributees of the estate of a deceased Participant, or the transferee of an Award, in any such case, pursuant to the terms and conditions of the Plan and the applicable Agreement and in accordance with such terms and conditions as may be specified from time to time by the Committee, the Company shall be under no obligation to issue Shares thereunder unless and until the Company is satisfied, as determined in the discretion of the Committee, that the person or persons exercising such Award, or to receive such payment, are the duly appointed legal representative of the deceased Participant’s estate or the proper legatees or distributees thereof, or the valid transferee of such Award, as applicable. Any purported assignment, transfer or encumbrance of an Award that does not comply with this Section 13.2 shall be void and unenforceable against the Company.

ARTICLE XIV.

RIGHTS OF PARTICIPANTS

14.1Rights or Claims. No individual shall have any rights or claims under the Plan except in accordance with the provisions of the Plan and any applicable Award Agreement. The grant of an Award under the Plan shall not confer any rights upon the Participant holding such Award other than such terms, and subject to such conditions, as are specified in the Plan as being applicable to such type of Award, or to all Awards, or as are expressly set forth in the Award Agreement evidencing such Award. Without limiting the generality of the foregoing, nothing contained in the Plan or in any Award Agreement shall be deemed to:

(a)Give any Employee or Non-Employee Director the right to be retained in the service of the Company, an Affiliate and/or a Subsidiary, whether in any particular position, at any particular rate of compensation, for any particular period of time or otherwise;

(b)Restrict in any way the right of the Company, an Affiliate and/or a Subsidiary to terminate, change or modify any Employee’s employment or any Non-Employee Director’s service as a Director at any time with or without Cause;

(c)Confer on any Consultant any right of continued relationship with the Company, an Affiliate and/or a Subsidiary, or alter any relationship between them, including any right of the Company or an Affiliate or Subsidiary to terminate, change or modify its relationship with a Consultant;

(d)Give any Employee, Non-Employee Director or Consultant the right to receive any bonus, whether payable in cash or in Shares, or in any combination thereof, from the Company, an Affiliate and/or a Subsidiary, nor be construed as limiting in any way the right of the Company, an Affiliate and/or a Subsidiary to determine, in its sole discretion, whether or not it shall pay any Employee, Non-Employee Director or Consultant bonuses, and, if so paid, the amount thereof and the manner of such payment; or

23

Exhibit 10.2

(e)Give any Participant any rights whatsoever with respect to an Award except as specifically provided in the Plan and the Award Agreement.

14.2Adoption of the Plan. The adoption of the Plan shall not be deemed to give any Employee, Non-Employee Director or Consultant or any other individual any right to be selected as a Participant or to be granted an Award, or, having been so selected, to be selected to receive a future Award.

14.3Vesting. Notwithstanding any other provision of the Plan, a Participant’s right or entitlement to exercise or otherwise vest in any Award not exercisable or vested at the time of grant shall only result from continued services as a Non-Employee Director or Consultant or continued employment, as the case may be, with the Company or any Subsidiary or Affiliate, or satisfaction of any other performance goals or other conditions or restrictions applicable, by its terms, to such Award.

14.4No Effects on Benefits. Payments and other compensation received by a Participant under an Award are not part of such Participant’s normal or expected compensation or salary for any purpose, including calculating termination, indemnity, severance, resignation, redundancy, end of service payments, bonuses, long-service awards, pension or retirement benefits or similar payments under any laws, plans, contracts, arrangements or otherwise. No claim or entitlement to compensation or damages arises from the termination of the Plan or diminution in value of any Award or Shares purchased or otherwise received under the Plan.

14.5One or More Types of Awards. A particular type of Award may be granted to a Participant either alone or in addition to other Awards under the Plan.

ARTICLE XV.

CHANGE OF CONTROL

15.1Treatment of Outstanding Awards. In the event of a Change of Control, unless otherwise specifically prohibited by any applicable laws, rules or regulations or otherwise provided in any applicable Award Agreement, as in effect prior to the occurrence of the Change of Control, specifically with respect to a Change of Control:

(a)In its discretion, and on such terms and conditions as it deems appropriate, the Committee may provide, either by the terms of the Award Agreement or by resolution adopted prior to the occurrence of such Change of Control, that any Options, SARs and Other Stock-Based Awards (if applicable) which are outstanding shall become exercisable as determined by the Committee, notwithstanding anything to the contrary in the Award Agreement; provided, however, that if the surviving or successor corporation to the Company, or any parent or subsidiary thereof, or any other corporation that is a party to the transaction resulting in the Change of Control, does not agree to assume, or substitute equivalent options or other awards for, such Options, SARs or Other Stock-Based Awards, or in the event of a liquidation of the Company, then immediately prior to the occurrence of such Change of Control, or as of such earlier date as the Committee may prescribe, any and all Options, SARs and Other Stock-Based Awards (if applicable) which are outstanding shall immediately become fully exercisable as to all Shares covered thereby, notwithstanding anything to the contrary in the Plan or the Award Agreement.

24

Exhibit 10.2

(b)In its discretion, and on such terms and conditions as it deems appropriate, the Committee may provide, either by the terms of the Award Agreement or by resolution adopted prior to the occurrence of such Change of Control, that restrictions, performance goals or other conditions applicable to Restricted Stock Units, Shares of Restricted Stock and Other Stock-Based Awards previously awarded to Participants shall be canceled or deemed achieved, the Period of Restriction applicable thereto shall terminate, and restrictions on transfer, sale, assignment, pledge or other disposition applicable to any such Shares of Restricted Stock shall lapse, in each case, to the extent provided by the Committee, notwithstanding anything to the contrary in the Award Agreement; provided, however, that if the surviving or successor corporation to the Company, or any parent or subsidiary thereof, or any other corporation that is a party to the transaction resulting in the Change of Control does not agree to assume, or substitute equivalent awards for, any such Awards, or in the event of a liquidation of the Company, then immediately prior to the occurrence of such Change of Control, any restrictions, performance goals or other conditions applicable to Restricted Stock Units, Shares of Restricted Stock and Other Stock-Based Awards previously awarded to Participants shall be immediately canceled or deemed achieved, the Period of Restriction applicable thereto shall immediately terminate, and all restrictions on transfer, sale, assignment, pledge or other disposition applicable to any such Shares of Restricted Stock shall immediately lapse, notwithstanding anything to the contrary in the Plan or the Award Agreement.

(c)In its discretion, and on such terms and conditions as it deems appropriate, the Committee may provide, either by the terms of the Award Agreement or by resolution adopted prior to the occurrence of such Change of Control, that any Awards which are outstanding shall, in whole or in part, immediately become vested and nonforfeitable; provided, however, that if the surviving or successor corporation to the Company, or any parent or subsidiary thereof, or any other corporation that is a party to the transaction resulting in the Change of Control does not agree to assume, or substitute equivalent awards for, any such Awards, or in the event of a liquidation of the Company, then immediately prior to the occurrence of such Change of Control, all Awards which are outstanding shall immediately become fully vested and nonforfeitable.

(d)In its discretion, and on such terms and conditions as it deems appropriate, the Committee may provide, either by the terms of the Award Agreement or by resolution adopted prior to the occurrence of such Change of Control, that the target payment opportunities attainable under any outstanding Awards of Performance Units, Performance Shares, Cash-Based Awards and other Awards shall be deemed to have been fully or partially earned for any Performance Period(s), as determined by the Committee, immediately prior to the effective date of the Change of Control. Notwithstanding the immediately preceding sentence to the contrary, if the surviving or successor corporation to the Company, or any parent or subsidiary thereof, or any other corporation that is a party to the transaction resulting in the Change of Control does not agree to assume, or substitute equivalent awards for, any such Awards, or in the event of a liquidation of the Company, then the target payment opportunities attainable under any outstanding Awards of Performance Units, Performance Shares, Cash-Based Awards and other Awards shall be deemed to have been fully earned for the entire Performance Period(s) immediately prior to the effective date of the Change of Control, unless actual performance exceeds the target, in which case actual performance shall be used, and (i) there shall be paid out to each Participant holding such an Award denominated in Shares, not later than five (5) days prior to the effective date of the Change of Control, a pro rata number of Shares (or the equivalent Fair Market Value thereof, as determined by the Committee, in cash) based upon an assumed achievement of all relevant targeted performance goals, unless actual performance exceeds the target, in which case actual performance shall be used, and upon the length of time within the Performance Period which has elapsed prior to the Change of Control, and (ii) Awards denominated in cash shall be paid pro rata to applicable Participants in cash within thirty (30) days following the effective date of the Change of Control, with the pro-ration determined as a function of the length of

25

Exhibit 10.2

time within the Performance Period which has elapsed prior to the Change of Control, and based on an assumed achievement of all relevant targeted performance goals, unless actual performance exceeds the target, in which case actual performance shall be used.

(e)In its discretion, and on such terms and conditions as it deems appropriate, the Committee may provide, either by the terms of the Award Agreement applicable to any Award or by resolution adopted prior to the occurrence of such Change of Control, that any Award the payment or settlement of which was deferred under Section 20.6 or otherwise may be paid or distributed immediately prior to the Change of Control, except as otherwise provided by the Committee in accordance with Section 15.1(f); provided, however, that if the surviving or successor corporation to the Company, or any parent or subsidiary thereof, or any other corporation that is a party to the transaction resulting in the Change of Control does not agree to assume, or substitute equivalent awards for, any such Awards, or in the event of a liquidation of the Company, then any such Award shall be paid or distributed immediately prior to such Change of Control, except as otherwise provided by the Committee in accordance with Section 15.1(f).

(f)In its discretion, and on such terms and conditions as it deems appropriate, the Committee may provide, either by the terms of the Award Agreement applicable to any Award or by resolution adopted prior to the occurrence of the Change of Control, that any outstanding Award shall be adjusted by substituting for each Share subject to such Award immediately prior to the transaction resulting in the Change of Control the consideration (whether stock or other securities of the surviving corporation or any successor corporation to the Company, or a parent or subsidiary thereof, or that may be issuable by another corporation that is a party to the transaction resulting in the Change of Control) received in such transaction by holders of Shares for each Share held on the closing or effective date of such transaction, in which event the aggregate Option Price or Grant Price, as applicable, of the Award shall remain the same; provided, however, that if such consideration received in such transaction is not solely stock of a successor, surviving or other corporation, the Committee may provide for the consideration to be received upon exercise or payment of an Award, for each Share subject to such Award, to be solely stock or other securities of the successor, surviving or other corporation, as applicable, equal in fair market value, as determined by the Committee, to the per-Share consideration received by holders of Shares in such transaction.

(g)In its discretion, and on such terms and conditions as it deems appropriate, the Committee may provide, either by the terms of the Award Agreement applicable to any Award or by resolution adopted prior to the occurrence of the Change of Control, that any outstanding Award (or portion thereof) shall be converted into a right to receive cash, on or as soon as practicable following the closing date or expiration date of the transaction resulting in the Change of Control in an amount equal to the highest value of the consideration to be received in connection with such transaction for one Share, less the per-Share Option Price, Grant Price or outstanding unpaid purchase price, as applicable to the Award, multiplied by the number of Shares subject to such Award, or the applicable portion thereof.

26

Exhibit 10.2

(h)The Committee may, in its discretion, provide that an Award can or cannot be exercised after, or will otherwise terminate or not terminate as of, a Change of Control.

15.2No Implied Rights; Other Limitations. No Participant shall have any right to prevent the consummation of any of the acts described in Section 4.3 or 15.1 affecting the number of Shares available to, or other entitlement of, such Participant under the Plan or such Participant’s Award. Any actions or determinations of the Committee under this Article XV need not be uniform as to all outstanding Awards, nor treat all Participants identically. Notwithstanding any provision of Section 15.1 to the contrary, no actions of the Committee under Section 15.1 shall materially impair the previously accrued rights of a Participant under any outstanding Award without the written consent of such Participant unless otherwise provided in the applicable Award Agreement. Notwithstanding the adjustments described in Section 15.1, in no event may any Option or SAR be exercised after ten (10) years from the date it was originally granted, and any changes to ISOs pursuant to this Article XV shall, unless the Committee determines otherwise, only be effective to the extent such adjustments or changes do not cause a “modification” (within the meaning of Section 424(h)(3) of the Code) of such ISOs or adversely affect the tax status of such ISOs.

15.3Termination, Amendment, and Modifications of Change of Control Provisions. Notwithstanding any other provision of the Plan (but subject to the limitations of Section 15.1(h), the last sentence of Section 16.1 and Section 16.2) or any Award Agreement provision, the provisions of this Article XV may not be terminated, amended, or modified on or after the date of a Change of Control to materially impair any Participant’s Award theretofore granted and then outstanding under the Plan without the prior written consent of such Participant.

15.4Compliance with Section 409A. Notwithstanding any other provisions of the Plan or any Award Agreement to the contrary, if a Change of Control that is not a Qualified Change of Control occurs, and payment or distribution of an Award constituting deferred compensation subject to Section 409A of the Code would otherwise be made or commence on the date of such Change of Control (pursuant to the Plan, the Award Agreement or otherwise), (a) the vesting of such Award shall accelerate in accordance with the Plan and the Award Agreement, (b) such payment or distribution shall not be made or commence prior to the earliest date on which Code Section 409A permits such payment or distribution to be made or commence without additional taxes or penalties under Section 409A, and (c) in the event any such payment or distribution is deferred in accordance with the immediately preceding clause (b), such payment or distribution that would have been made prior to the deferred payment or commencement date, but for Code Section 409A, shall be paid or distributed on such earliest payment or commencement date, together, if determined by the Committee, with interest at the rate established by the Committee. The Committee shall not extend the period to exercise an Option or Stock Appreciation Right to the extent that such extension would cause the Option or Stock Appreciation Right to become subject to Code Section 409A. Additionally, the Committee shall not take any action pursuant to this Article XV that would cause an Award that is otherwise exempt from Code Section 409A to become subject to Code Section 409A, or that would cause an Award that is subject to Code Section 409A to fail to satisfy the requirements of Code Section 409A.

ARTICLE XVI.

AMENDMENT, MODIFICATION, AND TERMINATION

16.1Amendment, Modification, and Termination. The Board may, at any time and with or without prior notice, amend, alter, suspend, or terminate the Plan, and the Committee may, to the extent permitted by the Plan, amend the terms of any Award theretofore granted, including any Award Agreement, in each case, retroactively or prospectively; provided, however, that no such amendment, alteration, suspension, or termination of the Plan shall be made which, without first obtaining approval of the shareholders of the Company (where such approval is necessary to satisfy (i) the then-applicable requirements of Rule 16b-3, (ii) any requirements under the Code relating to ISOs,

27

Exhibit 10.2

or (iii) any applicable law, regulation or rule (including the applicable regulations and rules of the SEC and any national securities exchange)), would:

(a)except as is provided in Section 4.3, increase the maximum number of Shares which may be sold or awarded under the Plan or increase the maximum limitations set forth in Section 4.2;

(b)except as is provided in Section 4.3, decrease the minimum Option Price or Grant Price requirements of Sections 6.3 and 7.2, respectively;

(c)change the class of persons eligible to receive Awards under the Plan;

(d)extend the duration of the Plan or the period during which Options or SARs may be exercised under Section 6.4 or 7.6, as applicable; or

(e)otherwise require shareholder approval to comply with any applicable law, regulation or rule (including the applicable regulations and rules of the SEC and any national securities exchange).

In addition, (A) no such amendment, alteration, suspension or termination of the Plan or any Award theretofore granted, including any Award Agreement, shall be made which would materially impair the previously accrued rights of a Participant under any outstanding Award without the written consent of such Participant, provided, however, that the Board may amend or alter the Plan and the Committee may amend or alter any Award, including any Agreement, either retroactively or prospectively, without the consent of the applicable Participant, (x) so as to preserve or come within any exemptions from liability under Section 16(b) of the Exchange Act, pursuant to the rules and releases promulgated by the SEC (including Rule 16b-3), or (y) if the Board or the Committee determines in its discretion that such amendment or alteration either (I) is required or advisable for the Company, the Plan or the Award to satisfy, comply with or meet the requirements of any law, regulation, rule or accounting standard or (II) is not reasonably likely to significantly diminish the benefits provided under such Award, or that such diminishment has been or will be adequately compensated, and (B) except as is provided in Section 4.3, but notwithstanding any other provisions of the Plan, neither the Board nor the Committee may take any action: (1) to amend the terms of an outstanding Option or SAR to reduce the Option Price or Grant Price thereof, cancel an Option or SAR and replace it with a new Option or SAR with a lower Option Price or Grant Price, or that has an economic effect that is the same as any such reduction or cancellation; or (2) to cancel an outstanding Option or SAR having an Option Price or Grant Price above the then-current Fair Market Value of the Shares in exchange for cash or the grant of another type of Award, without, in each such case, first obtaining approval of the shareholders of the Company of such action.

16.2Adjustment of Awards Upon the Occurrence of Certain Unusual or Nonrecurring Events. The Board or the Committee shall make adjustments in the terms and conditions of, and the criteria included in, Awards in recognition of unusual or nonrecurring events (including the events described in Section 4.3) affecting the Company or the financial statements of the Company or of changes in applicable laws, regulations, or accounting principles in order to prevent unintended dilution or enlargement of the benefits or potential benefits intended to be made available under the Plan. Any such adjustment with respect to an Award intended to be an ISO shall be made only to the extent consistent with such intent, unless the Board or the Committee determines otherwise. Additionally, neither the Board nor the Committee shall not make any adjustment pursuant to this Article XVI that would cause an Award that is otherwise exempt from Code Section 409A to become subject to Code Section 409A, or that would cause an Award that is subject to Code Section 409A to fail to satisfy the requirements of Code Section 409A. The determination of the Committee as to the foregoing adjustments shall be conclusive and binding on Participants under the Plan.

28

Exhibit 10.2

ARTICLE XVII.

TAX WITHHOLDING AND OTHER TAX MATTERS

17.1Tax Withholding. The Company and/or any Subsidiary or Affiliate are authorized to withhold from any Award granted or payment due under the Plan the amount of all Federal, state, local and non-United States taxes due in respect of such Award or payment and 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. The recipient of any payment or distribution under the Plan shall make arrangements satisfactory to the Company, as determined in the Committee’s discretion, for the satisfaction of any tax obligations that arise by reason of any such payment or distribution. The Company shall not be required to make any payment or distribution under or relating to the Plan or any Award until such obligations are satisfied or such arrangements are made, as determined by the Committee in its discretion.

17.2Withholding or Tendering Shares. Without limiting the generality of Section 17.1, the Committee may in its discretion permit a Participant to satisfy or arrange to satisfy, in whole or in part, the tax obligations incident to an Award by: (a) electing to have the Company withhold Shares or other property otherwise deliverable to such Participant pursuant to his or her Award (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 up to the maximum statutory withholding rates for Federal, state, local 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 such Participant (or by such Participant and his or her spouse jointly) and purchased or held for the requisite period of time as may be required to avoid the Company’s or the Affiliates’ or Subsidiaries’ incurring an adverse accounting charge, based, in each case, on the Fair Market Value of the Shares on the payment date as determined by the Committee. All such elections shall 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.

17.3Restrictions. The satisfaction of tax obligations pursuant to this Article XVII shall be subject to such restrictions as the Committee may impose, including any restrictions required by applicable law or the rules and regulations of the SEC, and shall be construed consistent with an intent to comply with any such applicable laws, rule and regulations.

17.4Special ISO Obligations. The Committee may require a Participant to give prompt written notice to the Company concerning any disposition of Shares received upon the exercise of an ISO within: (i) two (2) years from the date of granting such ISO to such Participant or (ii) one (1) year from the transfer of such Shares to such Participant or (iii) such other period as the Committee may from time to time determine. The Committee may direct that a Participant with respect to an ISO undertake in the applicable Award Agreement to give such written notice described in the preceding sentence, at such time and containing such information as the Committee may prescribe, and/or that the certificates evidencing Shares acquired by exercise of an ISO refer to such requirement to give such notice.

17.5Section 83(b) Election. If a Participant makes an election under Section 83(b) of the Code to be taxed with respect to an Award as of the date of transfer of Shares rather than as of the date or dates upon which the Participant would otherwise be taxable under Section 83(a) of the Code, such Participant shall deliver a copy of such election to the Company immediately after filing such election with the Internal Revenue Service. Neither the Company nor any Subsidiary or Affiliate shall have any liability or responsibility relating to or arising out of the filing or not filing of any such election or any defects in its construction.

29

Exhibit 10.2

17.6No Guarantee of Favorable Tax Treatment. Although the Company intends to administer the Plan so that Awards will be exempt from, or will comply with, the requirements of Code Section 409A, the Company does not warrant that any Award under the Plan will qualify for favorable tax treatment under Code Section 409A or any other provision of federal, state, local, or non-United States law. The Company shall not be liable to any Participant for any tax, interest, or penalties the Participant might owe as a result of the grant, holding, vesting, exercise, or payment of any Award under the Plan.

ARTICLE XVIII.

LIMITS OF LIABILITY; INDEMNIFICATION

18.1Limits of Liability.

(a)Any liability of the Company or a Subsidiary or Affiliate to any Participant with respect to any Award shall be based solely upon contractual obligations created by the Plan and the Award Agreement.

(b)None of the Company, any Subsidiary, any Affiliate, any member of the Board or the Committee or any other person participating in any determination of any question under the Plan, or in the interpretation, administration or application of the Plan, shall have any liability, in the absence of bad faith, to any party for any action taken or not taken in connection with the Plan, except as may expressly be provided by statute.

(c)Each member of the Committee, while serving as such, shall be considered to be acting in his or her capacity as a director of the Company. Members of the Board of Directors and members of the Committee acting under the Plan shall be fully protected in relying in good faith upon the advice of counsel and shall incur no liability except for gross negligence or willful misconduct in the performance of their duties.

(d)The Company shall not be liable to a Participant or any other person as to: (i) the non-issuance of Shares as to which the Company has been unable to obtain from any regulatory body having relevant jurisdiction the authority deemed by the Committee or the Company’s counsel to be necessary to the lawful issuance and sale of any Shares hereunder, and (ii) any tax consequence expected, but not realized, by any Participant or other person due to the receipt, exercise or settlement of any Option or other Award.

18.2Indemnification. Subject to the requirements of Indiana law, each individual who is or shall have been a member of the Committee or of the Board, or an officer of the Company to whom authority was delegated in accordance with Article III, shall be indemnified and held harmless by the Company against and from any loss, cost, liability, or expense that may be imposed upon or reasonably incurred by him or her in connection with or resulting from any claim, action, suit, or proceeding to which he or she may be a party or in which he or she may be involved by reason of any action taken or failure to act under the Plan and against and from any and all amounts paid by him or her in settlement thereof, with the Company’s approval, or paid by him or her in satisfaction of any judgment in any such action, suit, or proceeding against him or her, provided he or she shall give the Company an opportunity, at its own expense, to handle and defend the same before he or she undertakes to handle and defend it on his or her own behalf, unless such loss, cost, liability, or expense is a result of the individual’s own willful misconduct or except as provided by statute. The foregoing right of indemnification shall not be exclusive of any other rights of indemnification

30

Exhibit 10.2

to which such individual may be entitled under the Company’s Certificate of Incorporation or By-Laws, as a matter of law, or otherwise, or any power that the Company may have to indemnify or hold harmless such individual.

ARTICLE XIX.

SUCCESSORS

19.1Successors. All obligations of the Company under the Plan with respect to Awards granted hereunder shall be binding on any successor to the Company, whether the existence of such successor is the result of a direct or indirect purchase, merger, consolidation, or otherwise, of all or substantially all of the business and/or assets of the Company.

ARTICLE XX.

MISCELLANEOUS

20.1Drafting Context. Except where otherwise indicated by the context, any masculine term used herein also shall include the feminine; the plural shall include the singular and the singular shall include the plural. The words “Article,” “Section,” and “paragraph” herein shall refer to provisions of the Plan, unless expressly indicated otherwise. The words “include,” “includes,” and “including” herein shall be deemed to be followed by “without limitation” whether or not they are in fact followed by such words or words of similar import, unless the context otherwise requires.

20.2Forfeiture Events.

(a)Notwithstanding any provision of the Plan to the contrary, the Committee shall have the authority to determine (and may so provide in any Agreement) that a Participant’s (including his or her estate’s or transferee’s) rights (including the right to exercise any Option or SAR), payments and benefits with respect to any Award shall be subject to reduction, cancellation, forfeiture or recoupment in the event of the Participant’s Termination for Cause or due to voluntary resignation; serious misconduct; violation of the Company’s or a Subsidiary’s or Affiliate’s policies; breach of fiduciary duty; unauthorized disclosure of any trade secret or confidential information of the Company or a Subsidiary or Affiliate; breach of applicable noncompetition, nonsolicitation, confidentiality or other restrictive covenants; or other conduct or activity that is in competition with the business of the Company or any Subsidiary or Affiliate, or otherwise detrimental to the business, reputation or interests of the Company and/or any Subsidiary or Affiliate; or upon the occurrence of certain events specified in the applicable Award Agreement (in any such case, whether or not the Participant is then an Employee, Non-Employee Director or Consultant). The determination of whether a Participant’s conduct, activities or circumstances are described in the immediately preceding sentence shall be made by the Committee in its good faith discretion, and pending any such determination, the Committee shall have the authority to suspend the exercise, payment, delivery or settlement of all or any portion of such Participant’s outstanding Awards pending an investigation of the matter.

(b)If the Company is required to prepare an accounting restatement due to the material noncompliance of the Company, as a result of misconduct, with any financial reporting requirement under the securities laws, if the Participant knowingly or grossly negligently engaged in the misconduct, or knowingly or grossly negligently failed to prevent the misconduct, or if the Participant is one of the individuals subject to automatic forfeiture under Section 304 of the Sarbanes-Oxley Act of 2002, the Participant shall reimburse the Company the amount of any payment in settlement of an Award

31

Exhibit 10.2

earned or accrued during the twelve- (12-) month period following the first public issuance or filing with the SEC (whichever just occurred) of the financial document embodying such financial reporting requirement.

(c)Awards granted under the Plan may be subject to recoupment or clawback as may be required by applicable law, or any applicable recoupment or “clawback” policy adopted by the Company as may be amended from time to time.

20.3Severability. In the event any provision of the Plan shall be held illegal or invalid for any reason, the illegality or invalidity shall not affect the remaining parts of the Plan, and the Plan shall be construed and enforced as if the illegal or invalid provision had not been included.

20.4Transfer, Leave of Absence. For purposes of the Plan, a transfer of an Employee from the Company to an Affiliate or Subsidiary (or, for purposes of any ISO granted under the Plan, only a Subsidiary), or vice versa, or from one Affiliate or Subsidiary to another (or in the case of an ISO, only from one Subsidiary to another), and a leave of absence, duly authorized in writing by the Company or a Subsidiary or Affiliate, shall not be deemed a Termination of the Employee for purposes of the Plan or with respect to any Award (in the case of ISOs, to the extent permitted by the Code). The Committee shall have the discretion to determine the effects upon any Award, upon an individual’s status as an Employee, Non-Employee Director or Consultant for purposes of the Plan (including whether a Participant shall be deemed to have experienced a Termination or other change in status) and upon the exercisability, vesting, termination or expiration of any Award in the case of: (a) any Participant who is employed by an entity that ceases to be an Affiliate or Subsidiary (whether due to a spin-off or otherwise), (b) any transfer of a Participant between locations of employment with the Company, an Affiliate, and/or Subsidiary or between the Company, an Affiliate or Subsidiary or between Affiliates or Subsidiaries, (c) any leave of absence of a Participant, (d) any change in a Participant’s status from an Employee to a Consultant or a Non-Employee Director, or vice versa; and (e) upon approval by the Committee, any Employee who experiences a Termination but becomes employed by a partnership, joint venture, corporation or other entity not meeting the requirements of an Affiliate or Subsidiary, subject, in each case, to the requirements of Code Section 422 applicable to any ISOs and Code Section 409A applicable to any Options and SARs.

20.5Exercise and Payment of Awards. An Award shall be deemed exercised or claimed when the Secretary of the Company or any other Company official or other person designated by the Committee for such purpose receives appropriate written notice from a Participant, in form acceptable to the Committee, together with payment of the applicable Option Price, Grant Price or other purchase price, if any, and compliance with Article XVII, in accordance with the Plan and such Participant’s Award Agreement.

20.6Deferrals. To the extent provided in the Award Agreement, the Committee may permit or require a Participant to defer such Participant’s receipt of the payment of cash or the delivery of Shares that would otherwise be due to such Participant by virtue of the lapse or waiver of the Period of Restriction or other restrictions with respect to Restricted Stock or the payment or satisfaction of Restricted Stock Units, Performance Units, Performance Shares, Cash-Based Awards or Other Stock-Based Awards. If any such deferral election is required or permitted, (a) such deferral shall represent an unfunded and unsecured obligation of the Company and shall not confer the rights of a shareholder unless and until Shares are issued thereunder; (b) the number of Shares subject to such deferral shall, until settlement thereof, be subject to adjustment pursuant to Section 4.3; and (c) the Committee shall establish rules and procedures for such deferrals and payment or settlement thereof, which may be in cash, Shares or any combination thereof, and such deferrals may be governed by the terms and conditions of any deferred compensation plan of the Company or Affiliate specified by the Committee for such purpose. Notwithstanding any provisions of the Plan to the contrary, in no event shall any deferral under this Section 20.6 be permitted if the Committee determines that such deferral would result in the imposition of additional tax under Code Section 409A of the Code.

32

Exhibit 10.2

20.7No Effect on Other Plans. Neither the adoption of the Plan nor anything contained herein shall affect any other compensation or incentive plans or arrangements of the Company or any Subsidiary or Affiliate, or prevent or limit the right of the Company or any Subsidiary or Affiliate to establish any other forms of incentives or compensation for their directors, officers, eligible employees or consultants or grant or assume options or other rights otherwise than under the Plan.

20.8Section 16 of Exchange Act. Unless otherwise stated in the Award Agreement, notwithstanding any other provision of the Plan, any Award granted to an Insider shall be subject to any additional limitations set forth in any applicable exemptive rule under Section 16 of the Exchange Act (including Rule 16b-3) that are requirements for the application of such exemptive rule, and the Plan and the Award Agreement shall be deemed amended to the extent necessary to conform to such limitations.

20.9Requirements of Law; Limitations on Awards.

(a)The granting of Awards and the issuance of Shares under the Plan shall be subject to all applicable laws, rules, and regulations, and to such approvals by any governmental agencies or national securities exchanges as may be required.

(b)If at any time the Committee shall determine, in its discretion, that the listing, registration and/or qualification of Shares upon any securities exchange or under any state, Federal or non-United States law, or the consent or approval of any governmental regulatory body, is necessary or desirable as a condition of, or in connection with, the sale or purchase of Shares hereunder, the Company shall have no obligation to allow the grant, exercise or payment of any Award, or to issue or deliver evidence of title for Shares issued under the Plan, in whole or in part, unless and until such listing, registration, qualification, consent and/or approval shall have been effected or obtained, or otherwise provided for, free of any conditions not acceptable to the Committee.

(c)If at any time counsel to the Company shall be of the opinion that any sale or delivery of Shares pursuant to an Award is or may be in the circumstances unlawful or result in the imposition of excise taxes on the Company or any Subsidiary or Affiliate under the statutes, rules or regulations of any applicable jurisdiction, the Company shall have no obligation to make such sale or delivery, or to make any application or to effect or to maintain any qualification or registration under the Securities Act, or otherwise with respect to Shares or Awards and the right to exercise or payment of any Option or Award shall be suspended until, in the opinion of such counsel, such sale or delivery shall be lawful or will not result in the imposition of excise taxes on the Company or any Subsidiary or Affiliate.

(d)Upon termination of any period of suspension under this Section 20.9, any Award affected by such suspension which shall not then have expired or terminated shall be reinstated as to all Shares available before such suspension and as to the Shares which would otherwise have become available during the period of such suspension, but no suspension shall extend the term of any Award.

(e)The Committee may require each person receiving Shares in connection with any Award under the Plan to represent and agree with the Company in writing that such person is acquiring such Shares for investment without a view to the distribution thereof, and/or provide such other representations and agreements as the Committee may prescribe. The Committee, in its absolute discretion, may impose such restrictions on the ownership and transferability of the Shares purchasable or otherwise receivable by any person under any Award as it deems appropriate. Any such restrictions

33

Exhibit 10.2

shall be set forth in the applicable Award Agreement, and the certificates evidencing such shares may include any legend that the Committee deems appropriate to reflect any such restrictions.

(f)An Award and any Shares received upon the exercise or payment of an Award shall be subject to such other transfer and/or ownership restrictions and/or legending requirements as the Committee may establish in its discretion and may be referred to on the certificates evidencing such Shares, including restrictions under applicable Federal securities laws, under the requirements of any stock exchange or market upon which such Shares are then listed and/or traded, and under any blue sky or state securities laws applicable to such Shares.

20.10Participants Deemed to Accept Plan. By accepting any benefit under the Plan, each Participant and each person claiming under or through any such Participant shall be conclusively deemed to have indicated their acceptance and ratification of, and consent to, all of the terms and conditions of the Plan and any action taken under the Plan by the Board, the Committee or the Company, in any case in accordance with the terms and conditions of the Plan.

20.11Governing Law. The Plan and all Award Agreements and other agreements hereunder shall be construed in accordance with and governed by the laws of the state of Indiana, without giving effect to the choice of law principles thereof, except to the extent superseded by applicable United States federal law. Unless otherwise provided in the Award Agreement, Participants are deemed to submit to the exclusive jurisdiction and venue of the federal or state courts of Indiana, to resolve any and all issues that may arise out of or relate to the Plan or any related Award Agreement.

20.12Plan Unfunded. The Plan shall be unfunded. The Company shall not be required to establish any special or separate fund or to make any other segregation of assets to assure the issuance of Shares or the payment of cash upon exercise or payment of any Award. Proceeds from the sale of Shares pursuant to Options or other Awards granted under the Plan shall constitute general funds of the Company.

20.13Administration Costs. The Company shall bear all costs and expenses incurred in administering the Plan, including expenses of issuing Shares pursuant to any Options or other Awards granted hereunder.

20.14Uncertificated Shares. To the extent that the Plan provides for issuance of certificates to reflect the transfer of Shares, the transfer of such Shares may nevertheless be effected on a noncertificated basis, to the extent not prohibited by applicable law or the rules of any stock exchange.

20.15No Fractional Shares. An Option or other Award shall not be exercisable with respect to a fractional Share or the lesser of fifty (50) shares or the full number of Shares then subject to the Option or other Award. No fractional Shares shall be issued upon the exercise or payment of an Option or other Award.

20.16Deferred Compensation. If any Award would be considered deferred compensation as defined under Code Section 409A and would fail to meet the requirements of Code Section 409A, then such Award shall be null and void; provided, however, that the Committee may permit deferrals of compensation pursuant to the terms of a Participant’s Award Agreement, a separate plan, or a subplan which (in each case) meets the requirements of Code Section 409A. Additionally, to the extent any Award is subject to Code Section 409A, notwithstanding any provision herein to the contrary, the Plan does not permit the acceleration of the time or schedule of any distribution related to such Award, except as permitted by Code Section 409A.

34

Exhibit 10.2

20.17Participants Based Outside of the United States. Notwithstanding any provision of the Plan to the contrary, in order to comply with the laws or practices of countries other than the United States in which the Company, any Affiliate, and/or any Subsidiary operates or has Employees, Consultants or Non-Employee Directors, the Committee, in its sole discretion, shall have the power and authority to:

(a)Determine which Affiliates and Subsidiaries shall be covered by the Plan;

(b)Determine which Employees, Consultants and/or Non-Employee Directors outside the United States are eligible to participate in the Plan;

(c)Grant Awards (including substitutes for Awards), and modify the terms and conditions of any Awards, on such terms and conditions as the Committee determines necessary or appropriate to permit participation in the Plan by individuals otherwise eligible to so participate who are non-United States nationals or employed outside the United States, or otherwise to comply with applicable non-United States laws or conform to applicable requirements or practices of jurisdictions outside the United States;

(d)Establish subplans and adopt or modify exercise procedures and other terms and procedures, to the extent such actions may be necessary or advisable. Any subplans and modifications to Plan terms and procedures established under this Section 20.17 by the Committee shall be attached to the Plan as appendices; and

(e)Take any action, before or after an Award is made, that the Committee, in its discretion, deems advisable to obtain approval or comply with any necessary local government regulatory exemptions or approvals.

Notwithstanding the above, the Committee may not take any actions hereunder, and no Awards shall be granted, that would violate any applicable law.

35

EX-10.3

Exhibit 10.3

ANTHEM, INC.

COMPREHENSIVE NON-QUALIFIED DEFERRED

COMPENSATION PLAN

(AS AMENDED AND RESTATED EFFECTIVE

OCTOBER 1, 2019)

Exhibit 10.3

TABLE OF CONTENTS
			Page
Article I HISTORY AND PURPOSE				1
	1.01	History		1
	1.02	Purpose		2
Article II DEFINITIONS				2
	2.01	"Account"		2
	2.02	"Administrator"		3
	2.03	"Affiliate"		3
	2.04	"Anthem LTIP"		3
	2.05	"Anthem Plan"		3
	2.06	"Anthem SERP"		3
	2.07	"Anthem SERP Participant"		3
	2.08	"Beneficiary"		3
	2.09	"Bonus"		3
	2.10	"Bonus Deferral"		3
	2.11	"Code"		3
	2.12	"Committee"		3
	2.13	"Company"		4
	2.14	"Company Contribution"		4
	2.15	"Compensation"		4
	2.16	"Compensation Deferral"		4
	2.17	"Election Form"		4
	2.18	"Eligible Employee"		4
	2.19	"In-Service Payout"		4
	2.20	"Key Employee"		4
	2.21	"Make-Up Contribution"		4
	2.22	"Matching Contribution"		4
	2.23	"Merged Plan"		4
	2.24	"Participant"		5
	2.25	"Pension Benefit"		5
	2.26	"Pension Plan"		5
	2.27	"Plan"		5
	2.28	"Plan Year"		5
	2.29	"Predecessor Plan"		5
	2.30	"Predecessor Plan Account"		5
	2.31	"Predecessor Plan Participant"		5
	2.32	"Regulations"		5
	2.33	"Savings Plan"		5
	2.34	"Separation from Service"		5
	2.35	"Trigon Plan"		6
	2.36	"Trigon SERP"		6
	2.37	"UGS Pension Plan"		6
	2.38	"WellPoint Plan"		6
	2.39	"WellPoint SERP Participant"		6

i

Exhibit 10.3

	2.40	"2005 Anthem SERP"	6
	2.41	"2005 WellPoint Plan"	6
	2.42	"2005 Anthem Plan"	6
	2.43	"2005 Trigon Plan"	6
	2.44	"2005 Trigon SERP"	6
Article III ELIGIBILITY AND PARTICIPATION			6
	3.01	Eligibility	6
	3.02	Participation	7
	3.03	Enrollment Requirements	7
	3.04	Cessation of Participation	7
Article IV DEFERRALS AND CONTRIBUTIONS			8
	4.01	Compensation	8
	4.02	Bonus	9
	4.03	Matching Contributions	9
	4.04	Non-Elective Contributions	10
Article V SUPPLEMENTAL PENSION PLAN CONTRIBUTIONS			11
	5.01	Eligibility for Supplemental Pension Contribution	11
	5.02	In General	11
	5.03	Former DeCare Dental Pension Plan Participants	11
	5.04	QSERP	12
Article VI EARNINGS			13
	6.01	Investment Funds	13
	6.02	Conversion of Investments from Predecessor Plans and Merged Plans	13
Article VII VESTING			13
	7.01	Elective Deferrals under the Plan	13
	7.02	Supplemental Pension Plan Contributions	13
	7.03	Predecessor or Merged Plans	14
	7.04	Company and/or Make-Up Contributions	14
	7.05	Matching Contributions	14
Article VIII DISTRIBUTIONS			14
	8.01	Annual Election	14
	8.02	Time for Distribution	14
	8.03	In-Service Payout	14
	8.04	Separation from Service	14
	8.05	Subsequent Changes in Elections	16
	8.06	Death	16
	8.07	Hardship Withdrawal	16
	8.08	Valuation	17
	8.09	Tax Withholding	17
	8.10	Payment of Small Accounts	17
	8.11	Right of Offset	17
	8.12	Bona Fide Dispute	18
	8.13	Income Inclusion Under Code Section 409A	18
	8.14	Effect of Rehire	18
Article IX EFFECT ON PREDECESSOR AND MERGED PLANS			18
	9.01	Coordination With Predecessor Plans	18

i

Exhibit 10.3

	9.02	Predecessor Plan Accounts	18
	9.03	Merged Plans	18
Article X CLAIMS PROCEDURES			19
	10.01	Presentation of Claim	19
	10.02	Decision on Initial Claim	19
	10.03	Right to Review	19
	10.04	Decision on Review	20
	10.05	Form of Notice and Decision	21
	10.06	Legal Action	21
Article XI ADMINISTRATION			21
	11.01	Plan Administration	21
	11.02	Powers, Duties and Procedures	21
	11.03	Agents	21
	11.04	Binding Effect of Decisions	21
	11.05	Information	22
	11.06	Coordination with Other Benefits	22
Article XII MISCELLANEOUS			22
	12.01	Limitation of Rights	22
	12.02	Additional Restrictions	22
	12.03	Indemnification	22
	12.04	Assignment	22
	12.05	Inability to Locate Recipient	23
	12.06	Amendment and Termination	23
	12.07	Applicable Law	23
	12.08	No Funding	23
	12.09	Trust	23

i

Exhibit 10.3

ANTHEM, INC.

COMPREHENSIVE NON-QUALIFIED DEFERRED

COMPENSATION PLAN

(AS AMENDED AND RESTATED EFFECTIVE

AUGUST 1, 2014)

ARTICLE I

HISTORY AND PURPOSE

1.01 History. Anthem, Inc. (f/k/a WellPoint, Inc.) (the "Company") established the WellPoint, Inc. 2005 Comprehensive Executive Non-Qualified Retirement Plan, originally effective January 1, 2005 ("WellPoint Plan"), as a new plan for certain types of deferred compensation subject to Section 409A of the Internal Revenue Code of 1986, as amended (the "Code"), which governs nonqualified deferred compensation arrangements. The Company amended and restated the WellPoint Plan effective January 1, 2006, and renamed it the WellPoint, Inc. Comprehensive Non-Qualified Deferred Compensation Plan (the "Plan"). The Company amended and restated the Plan effective as of November 1, 2006, then restated it again effective as of January 1, 2009 for compliance with the final regulations issued under Code Section 409A. The Company subsequently amended and restated the Plan effective January 1, 2011, effective as of January 1, 2014 and again on December 2, 2014. The Company hereby amends and restates the Plan effective as of October 1, 2019.

(a)Merged Plans.In addition, effective January 1, 2005, the Company, one of its predecessors or entities related to the Company or a predecessor also established the following nonqualified deferred compensation plans applicable to amounts subject to Code Section 409A.

(i) the 2005 Anthem Supplemental Executive Retirement Plan;

(ii) the 2005 Anthem Deferred Compensation Plan;

(iii) the 2005 Trigon Insurance Company 401(k) Restoration Plan; and

(iv) the 2005 Supplemental Retirement Plan for Certain Employees of Trigon Insurance Company.

Each of the foregoing plans were separately maintained for the 2005 calendar year and cover deferred compensation that related solely to the 2005 calendar year. The Company subsequently ceased accruals and merged each of the plans into the Anthem Plan effective as of December 31, 2005 and are referred to herein as the Merged Plans (either alone or collectively).

(b)Predecessor Plans. The Company or one of its predecessors separately maintained the following nonqualified deferred compensation plans, which cover amounts earned and vested as of December 31, 2004 (including vested bonuses earned in 2004 and paid in 2005):

1

Exhibit 10.3

(i) each pre-2005 Anthem Long-Term Incentive Plan;

(ii) the WellPoint Health Networks Inc. Comprehensive Executive Non-Qualified Retirement Plan;

(iii) the Anthem Supplemental Executive Retirement Plan;

(iv) the Anthem Deferred Compensation Plan;

(v) the Trigon Insurance Company 401(k) Restoration Plan; and

(vi) the Supplemental Retirement Plan for Certain Employees of Trigon Insurance Company.

Each of the foregoing plans are referred to as a "Predecessor Plan(s)." Benefits ceased to accrue under the Predecessor Plans effective December 31, 2004 and, as such, are grandfathered for purposes of Code Section 409A. Solely for administrative purposes, Predecessor Plan Account balances, determined as of December 31, 2005, became accounted for under the 2005 WellPoint Plan effective as of January 1, 2006. In all other respects, each Predecessor Plan Account remains subject exclusively to the terms of the Predecessor Plan to which it relates.

1.02 Purpose.Except as otherwise provided herein, the Plan applies only to Participants to whose Account contributions are credited under Article IV and Article V. The purpose of the Plan isfor certain management and highly compensated employees to (1) restore certain benefits that cannot be provided under the tax-qualified plans maintained by the Company and its affiliates and (2) provide additional opportunities to defer one or more items of their compensation.

The Plan is intended to comply with Code Section 409A and shall be interpreted, administered and operated as necessary to comply with the requirements of Code Section 409A and applicable Treasury Regulations. The Plan is further intended to be a plan that is unfunded and maintained by Anthem, Inc. primarily for the purpose of providing deferred compensation for a select group of management or highly compensated employees within the meaning of the Employee Retirement Income Security Act of 1974 ("ERISA").

ARTICLE II

DEFINITIONS

In this Plan, the following terms have the meanings indicated below:

2.01 "Account" means the account maintained under the Plan for each Participant which is credited with amounts under Article IV and Article V of the Plan and adjusted periodically for investment performance under Article VI of the Plan and distributions or withdrawals in accordance with Article VIII. The Account of each Participant who is also a Predecessor Plan Participant shall also include the Predecessor Plan Account maintained on behalf of that Predecessor Plan Participant, as adjusted periodically for investment performance under Article VI of the Plan and distributions or withdrawals in accordance with the terms of the Predecessor Plan to which it relates. Each Participant's Account shall be divided into a series of Plan Year subaccounts, one for each Plan Year for which the Participant defers any Compensation under the Plan. To the extent it considers necessary or appropriate, the Administrator may further divide each such Plan Year subaccount into a series of separate subaccounts so that each category of deferred Compensation may be credited to its own separate subcategories within that particular Plan Year subaccount.

2

Exhibit 10.3

2.02 "Administrator" means the Executive Vice President and Chief Human Resources Officer of the Company and, if the context requires, the Human Resources Department of the Company, in charge of the day-to-day administration of the Plan.

2.03 "Affiliate" means an entity other than the Company whose employees participate in the tax-qualified retirement plans of ATH Holding Company, LLC or National Government Services, Inc. or whose employees are authorized to participate in the Plan by the Committee.

2.04 "Anthem LTIP" means each pre-2005 Anthem Long-Term Incentive Plan.

2.05 "Anthem Plan" means the Anthem Deferred Compensation Plan.

2.06 "Anthem SERP" means the Anthem Supplemental Executive Retirement Plan.

2.07 "Anthem SERP Participant"means an individual who is eligible on or after January 1, 2006 to earn a benefit under the 2005 Anthem SERP.

2.08 "Beneficiary" means the person or persons, trust or estate designated in writing, to receive a Participant's vested Account if the Participant dies before distribution of the entire vested balance credited to that Account. A Participant may designate one or more primary Beneficiaries and one or more secondary Beneficiaries. A Participant's Beneficiary designation must be made in writing pursuant to such procedures as the Administrator may establish and delivered to the Administrator before the Participant's death. The Participant may revoke or change this designation at any time before his or her death by following such procedures as the Administrator will establish. If the Administrator has not received a Participant's Beneficiary designation before the Participant's death or if the Participant does not otherwise have an effective Beneficiary designation on file when he or she dies, the vested balance of such Participant's Account will be distributed to his or her estate.

2.09 "Bonus"means an amount awarded to an Eligible Employee under an annual incentive plan maintained by the Company as determined by the Administrator.

2.10 "Bonus Deferral"means an election by a Participant to defer the receipt of a Bonus in accordance with the requirements of Article IV.

2.11 "Code" means the Internal Revenue Code of 1986, as amended from time to time.

2.12 "Committee" means the Compensation Committee of the Company's Board of Directors or a subcommittee of two or more members thereof. The Committee shall have full discretionary authority to administer and interpret the Plan, to determine eligibility for Plan benefits, to select employees for Plan participation, to determine the benefit entitlement of each Participant and Beneficiary hereunder and to correct errors. The Committee may delegate any of its duties and responsibilities not otherwise delegated hereunder

3

Exhibit 10.3

to the Executive Vice President and Chief Human Resources Officer as Administrator, and unless the Committee expressly provides to the contrary, any such delegation will carry with it the Committee's full discretionary authority with respect to the delegated duties and responsibilities. In no event, however, shall the Committee delegate its authority to amend or terminate the Plan pursuant to the provisions of Section 12.06. Decisions of the Committee or its delegate will be final and binding on all persons.

2.13 "Company" means Anthem, Inc., an Indiana corporation.

2.14 "Company Contribution" means, for any one Plan Year, the amount determined in accordance with Section 4.04.

2.15 "Compensation" means the respective definitions of compensation as set forth in the Savings Plan for elective deferrals and matching contributions, as constituted from time to time and as the context requires. In either case, the respective definition of compensation as set forth in the Savings Plan is determined without regard to the application of the limitation under Code Section 401(a)(17). Effective for Compensation Deferrals relating to compensation earned in Plan Years beginning on and after January 1, 2020, Compensation means base salary and commissions paid in the year to which the Compensation Deferrals relate consistent with Code Section 409A and the regulations promulgated thereunder.

2.16 "Compensation Deferral" means an election by a Participant to defer the receipt of the portion of his or her Compensation in accordance with the requirements of Article IV.

2.17 "Election Form" means the form or forms established from time to time by the Administrator that a Participant completes, signs and returns to the Administrator to make a deferral election, make or change a payment election, and/or make or change an investment election. To the extent authorized by the Administrator, such form may be electronic or set forth in some other media or format.

2.18 "Eligible Employee" means each employee of the Company or an Affiliate whose Compensation is equal to or in excess of the Code Section 401(a)(17) compensation limit in effect at the time the employee's eligibility is determined in accordance with Section 3.01.

2.19 "In-Service Payout" means a complete distribution of a Participant's vested Plan Year subaccount (including the related Matching Contribution) as of a specified date elected by a Participant.

2.20 "Key Employee" means for the period January 1 through December 31 each individual identified by the Administrator as of the immediately preceding September 30 as a "key employee," as defined under Code Section 416(i), disregarding Code Section 416(i)(5).

2.21 "Make-Up Contribution" means the contribution described under Section 4.04.

2.22 "Matching Contribution" means a matching contribution pursuant to Section 4.03.

2.23 "Merged Plan" means the 2005 Anthem SERP, the 2005 Anthem Plan, the 2005 Trigon Plan or the 2005 Trigon SERP.

4

Exhibit 10.3

2.24 "Participant" means a current or former Eligible Employee for whom an Account (including one or more Plan Year subaccounts) is maintained. A Participant shall also include a Predecessor Plan Participant for the limited purposes set forth in the Plan.

2.25 "Pension Benefit" means the benefit payable to an individual under the Pension Plan or the UGS Pension Plan, as the context requires.

2.26 "Pension Plan" means the qualified pension plan maintained by ATH Holding Company, LLC or its predecessors under which a Participant is actively accruing a benefit, which may include the Anthem Cash Balance Pension Plan B, as amended from time to time or renamed, and/or such other qualified pension plan maintained by ATH Holding Company, LLC.

2.27 "Plan" means this Anthem, Inc. Comprehensive Non-Qualified Deferred Compensation Plan, as amended from time to time.

2.28 "Plan Year" means the calendar year.

2.29 "Predecessor Plan" means any of the WellPoint Plan, the Anthem SERP, the Anthem Plan, the various Anthem LTIPs, the Trigon Plan or the Trigon SERP, each of which cover grandfathered benefits not subject to Code Section 409A.

2.30 "Predecessor Plan Account" means a hypothetical or bookkeeping account reflecting a grandfathered benefit under a Predecessor Plan, the amount of which was transferred to the Plan on December 31, 2005. Such account is credited with additional earnings pursuant to Article VI.

2.31 "Predecessor Plan Participant" means an individual who was eligible to participate in one or more of the Predecessor Plans and who, as of December 31, 2005 (the date Predecessor Plan Accounts were transferred to the Plan), has a Predecessor Plan Account.

2.32 "Regulations" mean Treasury Regulations issued under the Code.

2.33 "Savings Plan" means the Anthem 401(k) Retirement Savings Plan, as amended from time to time or renamed.

2.34 "Separation from Service"

means termination of the Participant's employment relationship (within the meaning of Code Section 409A and Regulations issued thereunder) with the Company and its affiliates and any other service relationship defined in such applicable Regulations, other than by reason of death. For purposes of the foregoing, whether an entity is affiliated with the Company shall be determined pursuant to the controlled group rules of Code Section 414, as modified by Code Section 409A. However, the Participant's employment relationship with the Employer shall be treated as continuing intact while the individual is on a military leave, sick leave or other bona fide leave of absence if the period of such leave does not exceed six months (or longer, if required by statute or contract). If the period of the leave exceeds six months and the Participant's right to reemployment is not provided either by statute or contract, the employment relationship is deemed to terminate on the first date immediately following such six-month period for purposes of Code Section 409A only.

5

Exhibit 10.3

2.35"Trigon Plan" means the Trigon Insurance Company 401(k) Restoration Plan.

2.36 "Trigon SERP" means the Supplemental Retirement Plan for Certain Employees of Trigon Insurance Company.

2.37 "UGS Pension Plan" means the UGS Pension Plan, as amended from time to time, and any predecessor qualified pension plan maintained by National Government Services, Inc.

2.38 "WellPoint Plan" means the WellPoint Health Networks Inc. Comprehensive Executive Non-Qualified Retirement Plan.

2.39 "WellPoint SERP Participant" means an individual who is eligible on or after January 1, 2006 to earn a benefit under Section 4.01 of the 2005 WellPoint Plan.

2.40"2005 Anthem SERP" means the 2005 Anthem Supplemental Executive Retirement Plan.

2.41 "2005 WellPoint Plan" means the WellPoint, Inc. 2005 Comprehensive Executive Non-Qualified Retirement Plan, as in effect on December 31, 2005.

2.42 "2005 Anthem Plan" means the 2005 Anthem Deferred Compensation Plan.

2.43 "2005 Trigon Plan" means the 2005 Trigon Insurance Company 401(k) Restoration Plan.

2.44 "2005 Trigon SERP" means the 2005 Supplemental Retirement Plan for Certain Employees of Trigon Insurance Company.

ARTICLE III

ELIGIBILITY AND PARTICIPATION

3.01 Eligibility. Determination of an individual as an Eligible Employee is made on a Plan Year by Plan Year basis. The Administrator may determine the individual is an Eligible Employee for the immediately following Plan Year pursuant to any such rules and requirements regarding the criteria for, and manner in, which individuals are determined to be an Eligible Employee. Such rules and requirements do not need to be consistent from Plan Year to Plan Year or among individuals. An individual who is determined to be an Eligible Employee shall be permitted to make a Compensation Deferral and Bonus Deferral election effective for the Plan Year that begins immediately following the Administrator's determination of the individual as an Eligible Employee in accordance with the rules set forth in Article IV. An individual who is determined to be an Eligible Employee shall not be permitted to make a Compensation Deferral with respect to Compensation earned or a Bonus Deferral with respect to the Bonus paid in the Plan Year in which he or she is determined to be an Eligible Employee. Such an individual may make a Bonus Deferral for the Bonus earned in such Plan Year pursuant to the rules set forth in Article IV provided the individual becomes an Eligible Employee before or during the enrollment period established for such Plan Year.

6

Exhibit 10.3

Notwithstanding any Plan provision to the contrary, the Committee may, in its sole discretion, place further requirements and/or limitations on an Eligible Employee's participation in any portion of the Plan.

In addition to and notwithstanding the foregoing or any provision to the contrary in Sections 4.01 and 4.02, an Eligible Employee who (a) is hired on or after January 2, 2019; (b) has never been a Participant in the Plan; and (c) is not eligible and does not participate in any other plan that would be aggregated with this Plan under Code Section 409A and the regulations promulgated thereunder may make a Compensation Deferral election and/or a Bonus Deferral election by filing an Election Form with the Administrator within thirty (30) days after such Eligible Employee’s date of hire with the Company or an Affiliate, but such election will only apply to Compensation for services to be performed subsequent to the election. Any such election shall be irrevocable on the thirtieth (30th) day after such Eligible Employee’s date of hire with the Company or an Affiliate.

3.02 Participation. To begin participation in the Plan, an Eligible Employee shall properly complete and timely submit an Election Form to the Administrator in accordance with the Administrator's rules. An Eligible Employee shall become a Participant on the first day on which a deferral of an elected amount or contribution is first credited to his or her Account. The Administrator may establish from time to time such other enrollment requirements as it determines in its sole discretion are necessary.

3.03 Enrollment Requirements. Election Forms shall be completed and filed with the Administrator by the time periods set forth in Article IV for the particular type of compensation to be deferred or during such other enrollment period as the Administrator determines in accordance with such Article. Subject to Section 8.05, a Participant may change or revoke a deferral or distribution election any time before such election becomes irrevocable, which shall occur as of the applicable deadline specified in Article IV unless the Administrator establishes an earlier deadline. Unless the Administrator determines otherwise, a new Election Form shall be required for each Plan Year in which an Eligible Employee wants to defer his or her Compensation or Bonus. A Participant's Election Form shall specify the form of payment, which shall be paid at the times specified in Article VIII. Unless otherwise specified herein or determined by the Administrator, the election made by the Participant for each Plan Year shall apply to all amounts credited to the Participant's Plan Year subaccount for such Plan Year.

3.04 Cessation of Participation.

(a)Loss of Eligibility. An individual who qualifies as an Eligible Employee for a particular Plan Year will continue to be an Eligible Employee until such time as the Administrator determines otherwise, including that the Eligible Employee no longer satisfies the Plan's eligibility requirements or is not a member of a select group of management or highly compensated employees. Any determination of ineligibility shall be effective for an immediately following Plan Year. Any individual who ceases to be an Eligible Employee shall continue to be a Participant with respect to amounts credited to his or her Account until such amounts are completely distributed to him or her in accordance with the Plan.

7

Exhibit 10.3

(b)Committee Discretion. Notwithstanding any Plan provision to the contrary, the Committee shall have the sole discretionary authority to exclude a Participant from making further deferrals under the Plan with such exclusion becoming effective as of the first day of the next succeeding Plan Year. Such Participant shall remain a Participant in the Plan until his Account balance is paid in full.

(c)Hardship Withdrawals. Elective or deemed deferrals made by a Participant who receives a hardship withdrawal shall be canceled pursuant to Section 8.07. The Participant shall remain a Participant in the Plan until his Account balance is paid in full.

(d)Separation from Service or Death. Notwithstanding anything in the Plan to the contrary, upon a Participant's Separation from Service or death, if earlier, any outstanding distribution election shall be given effect to the extent any amounts covered by such election are paid after such event.

ARTICLE IV

DEFERRALS AND CONTRIBUTIONS

4.01 Compensation.

(a)Elections. Subject to Article III (including the last paragraph of Section 3.01), an Eligible Employee may make a Compensation Deferral by filing an Election Form with the Administrator before the beginning of the Plan Year in which the Compensation is earned. All deferrals shall be made on a pre-tax basis. The Administrator may prescribe such rules and requirements regarding Compensation Deferral elections as it deems appropriate. An Eligible Employee's Savings Plan election cannot be changed during the Plan Year to which the Compensation Deferral election relates.

(b)Amount. For each Plan Year, an Eligible Employee may elect to make a Compensation Deferral for each payroll period in a percentage (not to exceed 60%) of his or her Compensation net of any required taxes, Savings Plan deferrals and salary reduction amounts described in Code Section 125. Deferrals to the Plan shall begin after the Eligible Employee has made the maximum salary deferrals permitted under the Savings Plan for the Plan Year under Code Section 402(g). For purposes of the preceding sentence, for any given Plan Year and for all Eligible Employees, the Administrator may determine whether such maximum salary deferral includes catch-up contributions (within the meaning of Code Section 402(g)).

(c)No Changes. Subject to Section 3.03 and the last paragraph of Section 3.01, a Compensation Deferral election shall be irrevocable as of the first day of the Plan Year to which the Election Form relates.

(d)Crediting. Compensation Deferrals made by a Participant will be credited to his or her applicable Plan Year subaccount as soon as practical after the date that the Compensation amount to which those Compensation Deferrals relate would have otherwise been paid.

8

Exhibit 10.3

4.02Bonus.

(a)Elections. The Administrator may prescribe such rules and requirements regarding Bonus Deferral elections.

(i) Generally. Subject to Article III (including the last paragraph of Section 3.01), an Eligible Employee may make a Bonus Deferral by filing an Election Form with the Administrator before the beginning of the Plan Year in which the Bonus is earned. All deferrals shall be made on a pre-tax basis.

(ii) Performance-Based Compensation. Notwithstanding anything in the Plan to the contrary, to the extent the Committee determines that a Bonus constitutes "performance-based compensation" (within the meaning of Code Section 409A and Regulations issued thereunder), the Committee may permit an Eligible Employee to file an Election Form with the Administrator on or before a date that occurs no later than six months before the end of the performance period provided that (A) the Eligible Employee performs services continuously from the later of the beginning of the performance period or the date the criteria are established through the date the Election Form is submitted and (B) the compensation is not readily ascertainable (within the meaning of Code Section 409A and Regulations issued thereunder) as of the date the Election Form is filed. If a Bonus Deferral election is made pursuant to this paragraph after the beginning of the Plan Year in which the Bonus is earned, such election shall be void if the Bonus becomes payable as a result of the Eligible Employee's death before the satisfaction of the performance criteria.

(b)Amount. For each Plan Year, an Eligible Employee may elect to make a Bonus Deferral in a percentage (not to exceed 80%) with respect to his or her Bonus net of any required taxes and salary reduction amounts described in Code Section 125.

(c)No Changes. Subject to Section 3.03 and the last paragraph of Section 3.01, such Bonus Deferral election shall be irrevocable as of the first day of the Plan Year to which the Election Form relates or the deadline established by the Administrator for performance-based compensation, as the case may be.

(d)Crediting. Bonus Deferrals made by the Participant will be credited to his or her applicable Plan Year subaccount as soon as practical after the date that the Bonus amount to which those Bonus Deferrals relate would have otherwise been paid.

4.03 Matching Contributions.

(a)Eligibility. Participants shall be entitled to a Matching Contribution under the Plan only to the extent he or she has satisfied the eligibility requirements for an employer matching contribution under the Savings Plan.

9

Exhibit 10.3

(b)Amount. The amount of the Matching Contribution to which a Participant is entitled will be a percentage of Compensation that he or she elects to defer under the Plan applied to the matching contribution formula then in effect under the Savings Plan less the amount of matching contribution made, if any, under the Savings Plan.

(c)Crediting. The Matching Contributions to which the Participant is entitled will be credited to his or her applicable Plan Year subaccount at such time and in such manner as determined by the Administrator and as applied uniformly to all Participants.

4.04 Non-Elective Contributions.

(a)Eligibility. For each Plan Year, the Company or an Affiliate, in its sole discretion, may, but is not required to, credit any amount it desires as a Company Contribution and/or Make-Up Contribution to the Plan Year subaccount of one or more Participants, on such terms as it determines, which need not be the same for each Participant.

(b)Company Contribution.

(i) Form of Payment. A Participant who receives a Company Contribution may make a separate election as to the form of payment for such Amount. Any Election Form pursuant to which a Participant selects a form of payment must be filed with the Administrator either:

(A) During a period of at least 30 days, or as otherwise specified by the Administrator in its discretion, that occurs before the beginning of the Plan Year in which the Company Contribution is earned or begins to be earned, as the case may be, or

(B) Within 30 days after the Company Contribution is awarded, provided the Company Contribution is subject to a vesting schedule of at least 12 months from the date the completed Election Form is filed with the Administrator (taking into account any automatic vesting provisions that may be provided upon certain terminations from employment that may occur before such 12 month period).

If no such Election Form is filed, then the form of payment shall be a lump sum at Separation from Service.

(ii) No Changes. Subject to Section 3.03, a Participant's Election Form shall be irrevocable as of the first day of the Plan Year to which the Election Form relates.

(iii) Amount. The Company Contribution credited to a Participant shall be determined by the Committee or the Administrator, in their discretion. Such contribution may be smaller or larger than the amount credited to any other

10

Exhibit 10.3

Participant, and the amount credited to any Participant for a Plan Year may be zero, even though one or more other Participants receive a Company Contribution for that Plan Year. Crediting of a Company Contribution for one Plan Year does not guarantee a Company Contribution for subsequent Plan Years.

(c)Make-Up Contribution.

(i) Form of Payment. If a Participant is credited with a Make-Up Contribution, such contribution shall be paid in a lump sum at the earlier of the Participant's Separation from Service or death.

(ii) Amount. The Make-Up Contribution credited to a Participant shall be determined by the Committee or the Administrator, in their discretion.

(d)Crediting. Company and Make-Up Contributions will be credited to a Participant's applicable Plan Year subaccount as soon as practical after the date that the Company or Affiliate determines such contributions shall be made.

ARTICLE V

SUPPLEMENTAL PENSION PLAN CONTRIBUTIONS

5.01 Eligibility for Supplemental Pension Contribution. A Participant whose benefit under the Pension Plan or UGS Pension Plan, as the case may be, is limited as a result of Code Section 401(a)(17) or Code Section 415, shall be credited with a Supplemental Pension Contribution as described in this Article. Supplemental Pension Contributions made to this Plan ceased as of January 1, 2019 and no Supplemental Pension Contributions shall be made to this Plan for Plan Years on and after January 1, 2019.

5.02 In General. Except as otherwise provided in this Article, the Supplemental Pension Contribution shall be equal to the difference between the amount which was actually credited to his account under the Pension Plan or the UGS Pension Plan, as the case may be, and the amount which would have been credited to his account had the amount not been limited as a result of Code Section 401(a)(17) or Code Section 415. The Supplemental Pension Contribution to which the Participant is entitled will be credited to his applicable Plan Year subaccount as of the date that the Pension Benefit to which such Supplemental Pension Contribution relates would otherwise have been credited under the Pension Plan.

5.03 Former DeCare Dental Pension Plan Participants. An individual who was a named participant in the DeCare Dental Deferred Compensation Plan and/or the DeCare Dental Restoration Plan as of such plans' termination on or about April 9, 2009, became a Participant under this Article as of April 9, 2009. Such Participant shall be eligible for a Supplemental Pension Contribution if he previously participated in the DeCare Dental Pension Plan, met the Rule of 65 (as defined under the Pension Plan) as of December 31, 2009 and became a Participant in the Pension Plan on January 1, 2010. In such circumstance, the Supplemental Pension Contribution will be equal to the "Supplemental Part A Benefit," the "Supplemental A* Benefit," if any, plus the "Supplemental Part B Benefit," if any, each as further described below.

11

Exhibit 10.3

(a)The Supplemental Part A Benefit will be equal to:

(i) the Part A Benefit (as determined under and set forth in the Pension Plan) that would have been payable to the Participant without regard to Code Section 401(a)(17) or Code Section 415, as of December 31, 2014 (or such earlier Separation from Service) less the Part A Benefit actually payable to the Participant under the Pension Plan and determined in an annuity, less

(ii) an annuity equivalent of any lump sum amount received by the Participant from (i) the DeCare Dental Deferred Compensation Plan and the DeCare Dental Restoration Plan upon the respective plans' termination, and (ii) if applicable, the non-qualified plans sponsored by BCBSM, Inc. (d/b/a Blue Cross Blue Shield of Minnesota) that provided benefits in excess of the benefits provided under such entity's qualified plans.

The Part A Benefit formula uses a Participant's actual "Salary" (as defined in Exhibit S of the Pension Plan), to determine the Part A Benefit. In the event a Participant has an individual agreement that provides for certain assumptions to apply in the determination of Salary, the terms of the agreement shall be given effect.

The Supplemental Part A Benefit will be credited to a Plan Year subaccount as soon as administratively feasible after December 31, 2014, or Separation from Service, as the case may be.

(b)If the Participant continues to be eligible to participate in the Pension Plan after December 31, 2014, the Supplemental Part A* Benefit will be equal to the Benefit Transition Adjustment (as determined and defined under the Pension Plan) without regard to Code Section 401(a)(17) less the actual Benefit Transition Adjustment payable to the Participant under the Pension Plan. Such Benefit Transition Adjustment will be determined each Plan Year. The Supplemental Part A* Benefit to which the Participant is entitled will be credited to his applicable Plan Year subaccount as of the date that the Benefit Transition Adjustment to which such Supplemental Part A* Benefit relates would otherwise have been credited under the Pension Plan.

(c)If the Participant continues to be eligible to participate in the Pension Plan after December 31, 2014, the Supplemental Part B Benefit will be determined under, and credited pursuant to, Section 5.02 of this Article.

5.04 QSERP. Notwithstanding anything in this Article to the contrary and subject to Section 12.06, the Company reserves the discretion to credit some or all of a Participant's Supplemental Pension Contributions including earnings on such amounts, on a prospective or retroactive basis, to the Pension Plan or the UGS Pension Plan, as the case may be. Any such credit shall only be made if it is consistent with applicable rules governing the Pension Plan and/or the UGS Pension Plan and Code Section 409A and Regulations issued thereunder.

12

Exhibit 10.3

ARTICLE VI

EARNINGS

6.01 Investment Funds. Amounts credited to a Participant's Account under the Plan shall be credited with earnings, at periodic intervals determined by the Administrator, at a rate equal to the actual rate of return for such period on the investment fund or funds or index or indices or vehicle or vehicles selected by that Participant. The investment options shall be comparable to those offered under the Savings Plan, from time to time, except for the option to invest in Anthem common stock or the Vanguard brokerage option (or other self-managed account option that may be offered under the Savings Plan). The Committee may offer other investment options in its discretion. The rate of return on such investment vehicles shall be tracked solely for the purpose of determining the phantom investment gain, earnings and losses to be credited to the Participant's Account during the deferral period. Neither the Company nor any of its affiliates shall be obligated to make any actual investment.

6.02 Conversion of Investments from Predecessor Plans and Merged Plans. Before January 1, 2006, amounts representing Predecessor Plan Account balances and account balances from Merged Plans were credited with earnings based on investment options available under the Predecessor Plan or Merged Plan to which they related. Effective as of January 1, 2006, those Predecessor Plan Accounts (or accounts from Merged Plans) shall be credited with earnings in accordance with Section 6.01. Before January 1, 2006, the Committee shall prescribe rules (that may vary among classes of Participants) that provide each Predecessor Plan Participant (and Participant with a Merged Plan account balance) an opportunity to select the investment fund or funds or index or indices to be used as the basis for crediting his or her Predecessor Plan Account (or Merged Plan account) with earnings as of January 1, 2006. To the extent the Committee has not received investment direction from a Participant before December 15, 2005 with respect to his or her Predecessor Plan Account or Merged Plan account, such Predecessor Plan Account or Merged Plan account shall be credited with earnings based upon a default investment option under the Savings Plan designated as such by the Committee or in accordance with such other rules as may be adopted by the Committee and applied on a consistent, uniform basis.

ARTICLE VII

VESTING

7.01 Elective Deferrals under the Plan. As of October 1, 2019, each Participant is 100% vested in that portion of his or her Account attributable to any Salary Deferrals (made before January 1, 2014), Compensation Deferrals and Bonus Deferrals, made on or after January 1, 2006. With respect to Compensation Deferrals and Bonus Deferrals made on and after October 1, 2019, each Participant will be 100% vested in that portion of his or her Account attributable to these Deferrals.

7.02 Supplemental Pension Plan Contributions. All Supplemental Pension Plan Contributions as determined in accordance with Article V of the Plan shall be 100% vested.

13

Exhibit 10.3

7.03 Predecessor or Merged Plans. As of October 1, 2019, any Participant whose Account is attributable to deferrals made and accruals earned before January 1, 2006 under a Predecessor Plan or Merged Plan are vested in such deferrals and accruals.

7.04 Company and/or Make-Up Contributions. Vesting of any Company Contributions and Make-Up Contributions shall be determined by the Company or Affiliate, in its sole discretion, and need not be the same for all Participants.

7.05 Matching Contributions. Notwithstanding anything in the Plan to the contrary, effective for periods after January 1, 2019, any Participant whose date of hire is on or after January 2, 2019 shall not be vested in any Matching Contribution until such Participant has completed a two year Period of Service (as defined in the Savings Plan), at which time such Participant shall be 100% vested in Matching Contributions.

ARTICLE VIII

DISTRIBUTIONS

8.01Annual Election. Participants must indicate on an Election Form which of the distribution options described below will govern payment of the Plan Year subaccount to which deferred amounts are credited before the beginning of the Plan Year in which the compensation is earned or such earlier or later time as may be specified by the Administrator pursuant to Article III or Article IV. Unless otherwise specified in the Plan or permitted by the Administrator, such distribution election applies to all amounts credited to the Plan Year subaccount, including, but not limited to, Matching Contributions and Supplemental Pension Contributions.

8.02 Time for Distribution. Except as otherwise provided in Section 8.07, distribution of a Participant's Account shall be made on the earliest to occur of:

(a)The date elected by a Participant under Section 8.03 with respect to an In‑Service Payout;

(b)The date set forth in Section 8.04 with respect to the Participant's Separation from Service; or

(c)The date set forth in Section 8.06 with respect to the Participant's death.

8.03 In-Service Payout. A Participant may irrevocably select, on his or her Election Form, a specified date to receive a lump sum In-Service Payout of all vested amounts credited to a Plan Year subaccount. Payment shall be made as soon as administratively feasible following the specified date and before the later of (i) December 31 of the calendar year containing the specified date, or (ii) the 15th day of the third month following the specified date. If any amounts are unvested at the time of the elected In-Service Payout date, but later become vested, such remaining amounts shall be paid at the earlier of the Participant's Separation from Service or Death.

8.04 Separation from Service. Upon a Participant's Separation from Service for any reason other than death, a Participant's vested Plan Year subaccount shall be paid or begin to be paid as soon as administratively feasible following Separation from Service and before the later of (i) December 31 of the calendar year in which the Participant's Separation from Service occurs, or (ii) the 15^th day of the third month

14

Exhibit 10.3

following the Participant's Separation from Service. Notwithstanding the foregoing, distributions made to a Key Employee upon such separation shall be paid or begin to be paid no earlier than the first day following the six month anniversary of the Participant's Separation from Service unless the Participant dies before or during such six-month period, in which case, such six-month delay shall not apply and payment shall be made pursuant to Section 8.06. Subsequent installment payments shall be made thereafter on or about the anniversary of the first installment payment.

Payment shall be made to the Participant in such form as determined below in subsection (a), (b), or (c).

(a)Lump Sum. A Participant's Plan Year subaccount balance shall be paid in a lump sum if:

(i) timely elected by the Participant pursuant to the Plan; or

(ii) no valid payment election is in effect when distribution is to be made.

(b)Annual Installments.

(i) Effective for amounts credited to subaccounts for Plan Years beginning on and after January 1, 2020, a Participant may elect to receive payment of his or her Plan Year subaccount balances in annual installments with a minimum installment period of two years and a maximum installment period of 15 years, provided that each installment shall be calculated by dividing the existing account balance by the number of years remaining in the elected installment period.

(ii) Effective for amounts credited to subaccounts for Plan Years beginning before January 1, 2020, a Participant may elect to receive payment of his or her Plan Year subaccount balance in either:

1. five annual installments; or

2. ten annual installments.

(c)Exceptions. Notwithstanding the foregoing provisions, the following shall apply:

(i) If a Participant's Account balance constituting contributions (other than Company and Make-Up Contributions) for all Plan Years at Separation from Service or death, whichever is earlier, is equal to or less than the limit then in effect under Code Section 402(g)(1)(B), such balance shall be paid in a lump sum in lieu of any election to receive installments.

15

Exhibit 10.3

(ii) A Participant who is entitled to receive a Supplemental Part A Benefit, as provided under Article V, shall receive such benefit in a lump sum. Payment of the Supplemental Part A* Benefit, if any, and Supplemental Part B Benefit, if any, shall be made as otherwise specified in the Plan.

8.05 Subsequent Changes in Elections.

(a)Participants who previously elected to receive an In-Service Payout pursuant to Section 8.03 shall be permitted to change his or her election to delay the time for payment until the fifth anniversary of the date the lump sum distribution would otherwise have been made. However, no such change of election under this Section shall have any force or effect or become effective until the expiration of the 12-month period measured from the filing date of such election. In addition, each such change of election with respect to an original election to receive an In-Service Payout shall be valid only if such election is made at least 12 months before the date of the scheduled distribution. In no event, however, may any change to the time for payment in effect for the Plan Year subaccount result in any acceleration of the distribution of that subaccount. Notwithstanding anything in this Section to the contrary, in the event of the Participant's Separation from Service or death after a subsequent election is made but before the end of the five-year delay described above, payment shall instead be made upon such Separation from Service or death, as the case may be.

(b)Notwithstanding any provision in the Plan to the contrary, on or before December 31, 2008, Participants may make changes to distribution elections previously filed with respect to amounts deferred under the Plan that relate to Plan Years 2005 through 2008 consistent with transition relief provided by the Department of the Treasury in Notice 2006-79, Notice 2007-86 and proposed regulations promulgated under Code Section 409A.

8.06 Death. If a Participant dies with a vested balance credited to one or more of his or her Plan Year subaccounts, whether or not the Participant was receiving payouts from those subaccounts at the time of his or her death, then the Participant's Beneficiary will receive the vested balance of each of those Plan Year subaccounts in a lump sum. If a Participant has any unvested Matching Contributions or Supplemental Pension Contributions credited to the Participant's Account as of death, such amounts will become fully vested, nonforfeitable and distributed pursuant to this Section.

8.07 Hardship Withdrawal. This Section shall only apply to amounts credited to a Participant's Account that are subject to Code Section 409A. Any hardship withdrawal right with respect to grandfathered amounts (within the meaning of Code Section 409A) shall be subject to rules, if any, of the Predecessor Plans. If a Participant (A) incurs a severe financial hardship as a result of (i) an illness or accident involving the Participant, his or her spouse, Beneficiary or any dependent (as determined pursuant to Code Section 152(a)), (ii) a casualty loss involving the Participant's property or (iii) other similar extraordinary and unforeseeable event beyond the Participant's control and (B) does not have any other resources available, whether through reimbursement or compensation (by insurance or otherwise) or liquidation of existing assets (to the extent such liquidation would not itself result in financial hardship), to satisfy such financial emergency, then the Participant may apply to the Administrator for an immediate distribution from the vested portion of his or her Account (but not the Predecessor Plan Account) in an amount necessary to satisfy such financial hardship and the tax liability attributable to such distribution. The Administrator shall have complete

16

Exhibit 10.3

discretion to accept or reject the request and shall in no event authorize a distribution in an amount in excess of that reasonably required to meet such financial hardship and the tax liability attributable to that distribution.

Any hardship withdrawal shall be made only to the extent permitted in accordance with Regulation Section 1.409A-3(i)(3). As a condition of the Administrator's acceptance of a request for a hardship withdrawal under this Section, the Participant's election to make Compensation Deferrals and/or Bonus Deferrals shall be terminated for the remainder of the Plan Year in which the hardship withdrawal is taken. In addition, such Participant shall be suspended from making Compensation Deferrals and Bonus Deferrals for the Plan Year immediately after the Plan Year in which the hardship withdrawal is taken. Such Participant, if then an Eligible Employee, may make a deferral election that relates to the second Plan Year following the Plan Year in which the hardship withdrawal was made in accordance with Article III and Article IV.

8.08 Valuation. The amount to be distributed from any Plan Year subaccount pursuant to this Article VIII shall be determined on the basis of the vested balance credited to that subaccount as of the most recent practicable date (as determined by the Administrator or its delegate) preceding the date of the actual distribution.

8.09 Tax Withholding. Income taxes and other taxes payable with respect to an Account shall be deducted from amounts payable under the Plan. All federal, state or local taxes that the Administrator determines are required to be withheld from any payments made pursuant to this Article VIII shall be withheld.

8.10 Payment of Small Accounts. The Administrator may, in its sole discretion which shall be evidenced in writing no later than the date of payment, elect to pay the value of the Participant's Account in a single lump sum if the balance of such Account is not greater than the applicable dollar amount under Code Section 402(g)(1)(B), provided the payment represents the complete liquidation of the Participant's interest in the Plan and all other account balance plans as determined pursuant to Regulation Section 1.409A-1(c)(2).

8.11 Right of Offset. The Company or an Affiliate shall have the right to offset any amounts payable to a Participant under the Plan to reimburse the Company or an Affiliate for liabilities or obligations of the Participant to the Company or Affiliate if the following conditions are met:

(a)the liabilities or obligations of the Participant to the Company or Affiliate were incurred in the ordinary course of the service relationship between the Participant and the Company or Affiliate;

(b)the entire amount to be offset does not exceed $5,000 in any taxable year of the Participant; and

(c)the offset is made at the same time and in the same amount as the liabilities or obligations otherwise would have been due and collected from the Participant.

17

Exhibit 10.3

8.12 Bona Fide Dispute. The Committee or the Administrator shall have the discretion to accelerate the time or schedule of payment under the Plan pursuant to Regulation Section 1.409A‑3(j)(4)(xiv) where such payment occurs as part of an arm's length settlement of a bona fide dispute between the Company or an Affiliate and a Participant as to the Participant's right to the deferred amount.

8.13 Income Inclusion Under Code Section 409A. The Committee or the Administrator shall have the discretion to accelerate the time or schedule of payment under the Plan if the Plan fails to meet the requirements of Code Section 409A and Regulations issued thereunder, provided that any such payment does not exceed the amount required to be included in income as a result of such failure.

8.14 Effect of Rehire. In the event a Participant experiences a Separation from Service, begins receiving payment of his or her Account and is subsequently rehired by the Company or an Affiliate, distributions shall continue as regularly scheduled.

ARTICLE IX

EFFECT ON PREDECESSOR AND MERGED PLANS

9.01 Coordination With Predecessor Plans. Solely for ease of administration, the Predecessor Plans may be attached as exhibits to the Plan and are incorporated by reference herein. Except as otherwise specifically provided in the Plan, eligibility for and entitlement to benefits under the Predecessor Plans are governed solely by the terms of those Predecessor Plans. Effective January 1, 2005 (or such earlier date as may be provided in a Predecessor Plan), Participants ceased to accrue further benefits under the Predecessor Plans; however, Predecessor Plan benefits continue to accrue earnings per the Predecessor Plan terms before January 1, 2006 and pursuant to the Plan effective as of January 1, 2006.

9.02 Predecessor Plan Accounts. Although benefits accrued under Predecessor Plans are grandfathered for purposes of Code Section 409A to the extent such amounts were earned and vested as of December 31, 2004, for administrative purposes, the December 31, 2005 Predecessor Plan Account balance of any Predecessor Plan Participant became accounted for under the Plan as of January 1, 2006 and shall be subject to Article VI. In all other respects, each Predecessor Plan Account shall remain subject exclusively to the terms of the Predecessor Plan to which it relates, including without limitation the existing distribution election (commencement date and form of distribution) applicable to the Predecessor Participant's Predecessor Plan Account. Any change in that distribution election must be made in compliance with the applicable provisions of the applicable Predecessor Plan.

9.03 Merged Plans. The 2005 Anthem Plan, the 2005 Anthem SERP, the 2005 Trigon Plan and the 2005 Trigon SERP were merged into the Plan effective as of December 31, 2005. All benefits accrued under such merged plans are subject to Code Section 409A. In conjunction with the merger, on and after January 1, 2006, benefits ceased to accrue under the 2005 Anthem Plan, the 2005 Anthem SERP, the 2005 Trigon Plan, and the 2005 Trigon SERP except as otherwise provided in the Plan. The rights and obligations of participants in the Merged Plans before their effective dates of merger shall be governed solely by the terms of the Merged Plans; provided, however, that to the extent minimally necessary to comply with the requirements of Section 409A of the Code, the requirements and restrictions of Sections 5.01(a)‑(c) and 8.01(a)-(d) of the

18

Exhibit 10.3

2005 WellPoint Plan shall apply, effective as of January 1, 2005, to the portion of the Participant's Account attributable to the 2005 Anthem Plan. Distributions of amounts attributable to Merged Plan benefits are made pursuant to a Participant's election in effect under the applicable Merged Plan. If no such election is on file, amounts shall be distributed in a single lump sum payment.

ARTICLE X

CLAIMS PROCEDURES

10.01 Presentation of Claim. No application is required for the commencement of benefits under the Plan. However, if a Participant or Beneficiary ("Claimant") believes that he or she is entitled to a greater benefit under the Plan, the Claimant may submit a signed, written application to the Committee for such a greater benefit. If such a claim relates to the contents of a notice received by the Claimant, the claim must be made within 90 days after such notice was received by the Claimant. All other claims shall be made within 180 days of the date on which the event that caused the claim to arise occurred. The claim shall state with particularity the determination desired by the Claimant. A claim shall be considered to have been made when a written communication made by the Claimant or the Claimant's representative is received by the Committee or its authorized delegate. References to the Committee in this Article includes references to the Executive Vice President and Chief Human Resources Officer and, if applicable, such officer's delegate. The Executive Vice President and Chief Human Resources Officer may further delegate, orally or in writing, authority to decide certain claims under this Article.

10.02 Decision on Initial Claim. The Committee shall consider a Claimant's claim and provide written notice to the Claimant of any denial within a reasonable time, but no later than 90 days after receipt of the claim. If an extension of time beyond the initial 90-day period for processing is required, written notice of the extension shall be provided to the Claimant before the initial 90-day period expires indicating the special circumstances requiring an extension of time and the date by which the Committee expects to render a final decision. In no event shall the period, as extended, exceed 180 days. If the Committee denies, in whole or in part, the claim, the notice shall set forth in a manner calculated to be understood by the Claimant:

(e)The specific reasons for the denial of the claim, or any part thereof;

(f)Specific references to pertinent Plan provisions upon which such denial was based;

(g)A description of any additional material or information necessary for the Claimant to perfect the claim, and an explanation of why such material or information is necessary; and

(h)An explanation of the claim review procedure, which explanation shall also include a statement of the Claimant's right to bring a civil action under ERISA Section 502(a) following a denial of the claim upon review.

10.03 Right to Review. A Claimant is entitled to appeal any claim that has been denied in whole or in part. To do so, the Claimant must submit a signed, written request for review with the Committee within 60 days after receiving a notice from the Committee that a claim has been denied, in whole or in part. Absent receipt by the Committee of a written request for review within such 60-day period, the claim shall be deemed to be conclusively denied. The Claimant (or the Claimant's duly authorized representative) may:

19

Exhibit 10.3

(i)Review and/or receive copies of, upon request and free of charge, all documents, records, and other information relevant to the Claimant's claim; and/or

(j)Submit written comments, documents, records or other information relating to her claim, which the Committee shall take into account in considering the claim on review, without regard to whether such information was submitted or considered in the initial review of the claim.

If a Claimant requests to review and/or receive copies of relevant information pursuant to subsection (a) above before filing a written request for review, the 60-day period for submitting the written request for review will be tolled during the period beginning on the date the Claimant makes such request and ending on the date the Claimant reviews or receives such relevant information.

10.04 Decision on Review. The Committee shall render its decision on review promptly, and not later than 60 days after it receives a written request for review of the denial, unless other special circumstances require additional time. In such case, the Committee will notify the Claimant, before the expiration of the initial 60-day period and in writing, of the need for additional time, the reason the additional time is necessary, and the date (no later than 60 days after expiration of the initial 60-day period) by which the Committee expects to render its decision on review. Notwithstanding the foregoing, if the Committee determines that an extension of the initial 60-day period is required due to the Claimant's failure to submit information necessary for the Committee to decide the claim, the time period by which the Committee must make its determination on review shall be tolled from the date on which the notification of the extension is sent to the Claimant until the date on which the Claimant responds to the request for additional information. The decision on review shall be written in a manner calculated to be understood by the Claimant, and shall contain:

(k)Specific reasons for the decision;

(l)Specific references to the pertinent Plan provisions upon which the decision was based;

(m)A statement that the Claimant is entitled to receive, upon request and free of charge, reasonable access to, and copies of, all documents, records or other information relevant (within the meaning of Department of Labor Regulation Section 2560.503-1(m)(8)) to the Claimant's claim;

(n)A statement of the Claimant's right to bring a civil action under ERISA Section 502(a) following a wholly or partially denied claim for benefits; and

(o)Such other matters as the Committee deems relevant.

20

Exhibit 10.3

10.05 Form of Notice and Decision. Any notice or decision by the Committee under this Article may be furnished electronically in accordance with Department of Labor Regulation Section 2520.104b-(1)(c)(i), (iii) and (iv).

10.06 Legal Action. Any final decision by the Committee shall be binding on all parties. A Claimant's compliance with the foregoing provisions of this Article is a mandatory prerequisite to a Claimant's right to commence any legal action with respect to any claim for benefits under the Plan. Any such legal action must be initiated no later than 180 days after the Committee renders its final decision. If a final determination of the Committee is challenged in court, such determination shall not be subject to de novo review and shall not be overturned unless proven to be arbitrary and capricious based on the evidence considered by the Committee at the time of such determination.

ARTICLE XI

ADMINISTRATION

11.01 Plan Administration. The Committee has overall responsibility for the Plan, but the Administrator shall have responsibility for the day-to-day administration of the Plan, as specified herein and as otherwise delegated by the Committee. The Administrator and members of the Committee may be Participants under this Plan. Any individual serving on the Committee who is a Participant shall not vote or act on any matter relating solely to himself or herself. The Chief Executive Officer, Executive Vice President and Chief Human Resources Officer or any other individual charged with administrative authority may not act on any matter involving such individual's own participation in the Plan.

11.02 Powers, Duties and Procedures. The Committee shall have full and complete discretionary authority to (i) make, amend, interpret and enforce all appropriate rules and regulations for the administration of the Plan, including any rules relating to trading restrictions as it determines necessary, and (ii) decide or resolve any and all questions including interpretations of the Plan, as may arise in connection with the claims procedures set forth in Article X or otherwise with regard to the Plan. The Committee shall have complete control and authority to determine the rights and benefits of all claims, demands and actions arising out of the provisions of the Plan of any Participant or Beneficiary or other person having or claiming to have any interest under the Plan. When making a determination or calculation, the Committee may rely on information furnished by a Participant or the Company, an Affiliate or other related entity. Benefits under the Plan shall be paid only if the Committee decides in its sole discretion that the Participant or Beneficiary is entitled to them. The Committee may delegate such powers and duties as it determines for the efficient administration of the Plan.

11.03 Agents. In the administration of this Plan, the Committee or the Administrator may, from time to time, employ agents and delegate to them such administrative duties as it sees fit (including acting through a duly appointed representative) and may from time to time consult with counsel who may be counsel to the Company, an Affiliate or other related entity.

11.04 Binding Effect of Decisions. Notwithstanding any other provision of the Plan to the contrary, the Committee or its delegate shall have complete discretion to interpret the Plan and to decide all matters under the Plan. Any such interpretation shall be final, conclusive and binding on all Participants, Beneficiaries and any person claiming under or through any Participant, in the absence of clear and convincing evidence that the Committee or its delegate acted arbitrarily and capriciously.

21

Exhibit 10.3

11.05 Information. To enable the Committee and the Administrator to perform its functions, the Company, an Affiliate or other related entity shall supply full and timely information to the Committee or the Administrator, as the case may be, on all matters relating to the compensation of its Participants, the dates of the death or Separation from Service and such other pertinent information as the Committee or Administrator may reasonably require.

11.06 Coordination with Other Benefits. The benefits provided to a Participant and the Beneficiary under the Plan are in addition to any other benefits available to such Participant under any other plan or program for employees of the Company, an Affiliate or other related entity. The Plan shall supplement and shall not supersede, modify or amend any other such plan or program except as may otherwise be expressly provided.

ARTICLE XII

MISCELLANEOUS

12.01 Limitation of Rights. Participation in the Plan does not give any individual the right to be retained in the service of the Company, any Affiliate or other related entity, or to interfere with the right of the Company, any Affiliate or other related entity to discipline or discharge the individual at any time, with or without cause, or to modify the Salary, Compensation or Bonus of such individual at any time.

12.02 Additional Restrictions. If the Administrator determines that additional restrictions or limitations must be placed on the investment vehicles utilized for measuring the return on the amounts credited to Participant Accounts, the right of Participants to make investment elections with respect to their Accounts, their ability to make or change distribution elections, their ability to defer distributions or to change the commencement date for the distribution of their benefits or the method of such distribution or their rights or status as creditors under the Plan in order to avoid current income taxation of amounts deferred under the Plan, the Administrator may, in its sole discretion, amend the Plan to impose such restrictions or limitations, cease deferrals under the Plan and/or defer distribution dates under the Plan.

12.03 Indemnification. The Company will indemnify and hold harmless the Directors, the members of the Committee and any delegate of the Committee, and employees of the Company and its Affiliates, from and against any and all liabilities, claims, costs and expenses, including attorneys' fees, arising out of an alleged breach in the performance of their fiduciary duties under the Plan, other than such liabilities, claims, costs and expenses as may result from the gross negligence or willful misconduct of such persons. The Company shall have the right, but not the obligation, to conduct the defense of such persons in any proceeding to which this Section applies.

12.04 Assignment. To the fullest extent permitted by law, benefits under the Plan and rights thereto are not subject in any manner to anticipation, alienation, sale, transfer, assignment, pledge, encumbrance, attachment, or garnishment by creditors of a Participant or a Beneficiary.

22

Exhibit 10.3

12.05 Inability to Locate Recipient. If a benefit under the Plan remains unpaid for two (2) years from the date it becomes payable, solely by reason of the inability of the Administrator to locate the Participant or Beneficiary entitled to the payment, the benefit shall be treated as forfeited. Any amount forfeited in this manner shall be restored without interest upon presentation of an authenticated written claim by the person entitled to the benefit.

12.06 Amendment and Termination.

(a)The Committee may, at any time, amend or terminate the Plan. Any amendment must be made in writing; no oral amendment will be effective. Except to the limited extent authorized pursuant to Section 12.02, no amendment may, without the consent of an affected Participant (or, if the Participant is deceased, the Participant's Beneficiary), adversely affect the Participant's or the Beneficiary's rights and obligations under the Plan with respect to amounts already credited to a Participant's Account, and all amounts deferred under the Plan before the date of any such amendment or termination of the Plan shall continue to become due and payable in accordance with the distribution provisions of Article VIII as in effect immediately before such amendment or termination.

(b)Notwithstanding subsection (a), if the Company exercises its discretion under Article V and determines an amendment is necessary to the Plan, participant consent shall only be required if the amendment impacts Supplemental Contributions and earnings credited through December 31, 2008.

(c)Upon termination of the Plan, the Committee reserves the discretion to accelerate distribution of the Accounts of Participants in accordance with regulations promulgated by the Department of Treasury under Code Section 409A.

12.07Applicable Law. To the extent not governed by Federal law, the laws of the State of Indiana shall govern the Plan. If any provision of the Plan is held to be invalid or unenforceable, the remaining provisions of the Plan will continue to be fully effective.

12.08 No Funding. The obligation to pay the vested balance of each Participant's Account shall at all times be an unfunded and unsecured obligation of the Company or its Affiliates, as the case may be, and Participants and Beneficiaries shall have the status of general unsecured creditors of the Company or applicable Affiliate. Except to the extent provided below in Section 12.09, Plan benefits will be paid from the general assets of the Company, and nothing in the Plan will be construed to give any Participant or any other person rights to any specific assets of the Company or its Affiliates. In all events, it is the intention of the Company and its Affiliates and all Participants that the Plan be treated as unfunded for tax purposes and for purposes of Title I of ERISA.

.

12.09 Trust. The benefits under the Plan will be paid from the assets of a grantor trust (the "Trust") established by the Company to assist it and its Affiliates in meeting their obligations hereunder and, to the extent that such assets are not sufficient, by the Company or the applicable Affiliate out of their general assets. The Trust shall conform to the terms of the Internal Revenue Service Model Trust in Internal Revenue Service Procedure 92-64 (or any successor procedure).

***

23

Exhibit 10.3

IN WITNESS WHEREOF, Anthem, Inc. has caused the Plan to be executed by its duly authorized representative as of the date indicated above.

ANTHEM, INC.

By:

Gail K. Boudreaux

President & Chief Executive Officer

24

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.

October 23, 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.

October 23, 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 September 30, 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

October 23, 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 September 30, 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

October 23, 2019

XML

Segment Information

9 Months Ended

Sep. 30, 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.

Prior to the second quarter of 2019, our Other segment included certain eliminations and corporate expenses not allocated to either of our other reportable segments. Beginning in the second quarter of 2019, our Other segment also includes IngenioRx, our PBM, which began its operations during the second quarter of 2019. In addition, during the second quarter, we reclassified our Diversified Business Group, or DBG, our integrated health services business, from our Government Business segment to the Other segment to reflect changes in how our segments are being managed. Amounts for 2018 have been reclassified to conform to the current year presentation for comparability. Based on the FASB guidance, as of September 30, 2019, IngenioRx and DBG do not collectively meet the quantitative thresholds for an operating segment.

Affiliated revenues represent revenues or cost for services provided by IngenioRx and DBG to our subsidiaries, are recorded at cost or management’s estimate of fair market value, and are eliminated in consolidation.

For our segment reporting, operating gains (losses) generated from IngenioRx and DBG affiliated activity have been included in our Commercial & Specialty Business and Government Business based upon their utilization of services from IngenioRx and DBG.

Financial data by reportable segment for the three and nine months ended September 30, 2019 and 2018 is as follows:

	Commercial & Specialty Business		Government Business		Other			Eliminations			Total
Three Months Ended September 30, 2019
Operating revenue - unaffiliated	$	9,284	$	15,955	$	1,205		$	—		$	26,444
Operating revenue - affiliated	—		—		1,303			(1,303		)	—
Operating gain (loss)	930		616		(18		)	—			1,528
Three Months Ended September 30, 2018
Operating revenue - unaffiliated	$	8,933	$	13,979	$	68		$	—		$	22,980
Operating revenue - affiliated	—		—		330			(330		)	—
Operating gain (loss)	834		456		(41		)	—			1,249
Nine Months Ended September 30, 2019
Operating revenue - unaffiliated	$	28,093	$	46,419	$	1,497		$	—		$	76,009
Operating revenue - affiliated	—		—		2,353			(2,353		)	—
Operating gain (loss)	3,511		1,471		(81		)	—			4,901
Nine Months Ended September 30, 2018
Operating revenue - unaffiliated	$	26,939	$	40,951	$	147		$	—		$	68,037
Operating revenue - affiliated	—		—		961			(961		)	—
Operating gain (loss)	3,284		1,477		(85		)	—			4,676

The major product revenues for each of the reportable segments for the three and nine months ended September 30, 2019 and 2018 are as follows:

	Three Months Ended   September 30						Nine Months Ended   September 30
	2019			2018			2019			2018
Commercial & Specialty Business
Managed care products	$	7,542		$	7,211		$	22,806		$	21,852
Managed care services	1,330			1,332			4,049			3,913
Dental/Vision products and services	325			306			975			914
Other	87			84			263			260
Total Commercial & Specialty Business	9,284			8,933			28,093			26,939
Government Business
Managed care products	15,847			13,860			46,111			40,610
Managed care services	108			119			308			341
Total Government Business	15,955			13,979			46,419			40,951
Other
Other	2,508			398			3,850			1,108
Eliminations
Eliminations	(1,303		)	(330		)	(2,353		)	(961		)
Total product revenues	$	26,444		$	22,980		$	76,009		$	68,037

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 and nine months ended September 30, 2019 and 2018 is as follows:

	Three Months Ended   September 30						Nine Months Ended   September 30
	2019			2018			2019			2018
Reportable segments’ operating revenue	$	26,444		$	22,980		$	76,009		$	68,037
Net investment income	242			250			737			708
Net realized gains on financial instruments	1			27			90			5
Other-than-temporary impairment losses recognized in income	(13		)	(6		)	(30		)	(18		)
Total revenues	$	26,674		$	23,251		$	76,806		$	68,732

A reconciliation of reportable segments’ operating gain to income before income tax expense included in our consolidated statements of income for the three and nine months ended September 30, 2019 and 2018 is as follows:

	Three Months Ended   September 30						Nine Months Ended   September 30
	2019			2018			2019			2018
Reportable segments’ operating gain	$	1,528		$	1,249		$	4,901		$	4,676
Net investment income	242			250			737			708
Net realized gains on financial instruments	1			27			90			5
Other-than-temporary impairment losses recognized in income	(13		)	(6		)	(30		)	(18		)
Interest expense	(185		)	(188		)	(556		)	(564		)
Amortization of other intangible assets	(84		)	(91		)	(256		)	(265		)
Gain (loss) on extinguishment of debt	—			1			1			(17		)
Income before income tax expense	$	1,489		$	1,242		$	4,887		$	4,525

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Fair Value (Tables)

9 Months Ended

Sep. 30, 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 September 30, 2019 and December 31, 2018 is as follows:

	Level I		Level II			Level III		Total
September 30, 2019
Assets:
Cash equivalents	$	1,258	$	—		$	—	$	1,258
Fixed maturity securities, available-for-sale:
United States Government securities	—		497			—		497
Government sponsored securities	—		131			—		131
States, municipalities and political subdivisions	—		4,742			—		4,742
Corporate securities	—		9,028			311		9,339
Residential mortgage-backed securities	—		4,014			3		4,017
Commercial mortgage-backed securities	—		90			—		90
Other securities	—		1,651			11		1,662
Total fixed maturity securities, available-for-sale	—		20,153			325		20,478
Equity securities:
Exchange traded funds	563		—			—		563
Fixed maturity mutual funds	—		631			—		631
Common equity securities	796		33			—		829
Private equity securities	—		—			306		306
Total equity securities	1,359		664			306		2,329
Other invested assets, current	10		—			—		10
Securities lending collateral	—		465			—		465
Derivatives	—		25			—		25
Total assets	$	2,627	$	21,307		$	631	$	24,565
Liabilities:
Derivatives	$	—	$	(1	)	$	—	$	(1	)
Total liabilities	$	—	$	(1	)	$	—	$	(1	)
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	—		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 September 30, 2019 and 2018 is as follows:

	Corporate Securities			Residential Mortgage- backed Securities		Other  Securities			Equity Securities			Total
Three Months Ended September 30, 2019
Beginning balance at July 1, 2019	$	297		$	3	$	11		$	305		$	616
Total gains (losses):
Recognized in net income	(3		)	—		—			(5		)	(8		)
Recognized in accumulated other comprehensive loss	12			—		—			—			12
Purchases	28			—		—			25			53
Sales	(9		)	—		—			(19		)	(28		)
Settlements	(18		)	—		—			—			(18		)
Transfers into Level III	4			—		—			—			4
Transfers out of Level III	—			—		—			—			—
Ending balance at September 30, 2019	$	311		$	3	$	11		$	306		$	631
Change in unrealized losses included in net income related to assets still held at September 30, 2019	$	—		$	—	$	—		$	(4	)	$	(4	)
Three Months Ended September 30, 2018
Beginning balance at July 1, 2018	$	304		$	4	$	26		$	312		$	646
Total gains (losses):
Recognized in net income	—			—		—			4			4
Recognized in accumulated other comprehensive loss	(1		)	—		—			—			(1		)
Purchases	32			—		3			5			40
Sales	(2		)	—		—			(3		)	(5		)
Settlements	(30		)	—		—			—			(30		)
Transfers into Level III	6			—		1			—			7
Transfers out of Level III	(2		)	—		(13		)	—			(15		)
Ending balance at September 30, 2018	$	307		$	4	$	17		$	318		$	646
Change in unrealized gains included in net income related to assets still held at September 30, 2018	$	—		$	—	$	—		$	9		$	9

A reconciliation of the beginning and ending balances of assets measured at fair value on a recurring basis using Level III inputs for the nine months ended September 30, 2019 and 2018 is as follows:

	Corporate Securities			Residential Mortgage- backed Securities			Other  Securities			Equity Securities			Total
Nine Months Ended September 30, 2019
Beginning balance at January 1, 2019	$	287		$	6		$	17		$	313		$	623
Total (losses) gains:
Recognized in net income	(7		)	—			—			(5		)	(12		)
Recognized in accumulated other comprehensive loss	14			—			—			—			14
Purchases	91			—			2			46			139
Sales	(11		)	—			—			(48		)	(59		)
Settlements	(58		)	(1		)	(2		)	—			(61		)
Transfers into Level III	4			—			3			—			7
Transfers out of Level III	(9		)	(2		)	(9		)	—			(20		)
Ending balance at September 30, 2019	$	311		$	3		$	11		$	306		$	631
Change in unrealized losses included in net income related to assets still held at September 30, 2019	$	—		$	—		$	—		$	(4	)	$	(4	)
Nine Months Ended September 30, 2018
Beginning balance at January 1, 2018	$	229		$	5		$	16		$	287		$	537
Total (losses) gains:
Recognized in net income	1			—			—			(228		)	(227		)
Recognized in accumulated other comprehensive loss	(3		)	—			—			—			(3		)
Purchases	94			—			12			263			369
Sales	(17		)	—			—			(4		)	(21		)
Settlements	(60		)	(1		)	(1		)	—			(62		)
Transfers into Level III	65			—			5			—			70
Transfers out of Level III	(2		)	—			(15		)	—			(17		)
Ending balance at September 30, 2018	$	307		$	4		$	17		$	318		$	646
Change in unrealized gains included in net income related to assets still held at September 30, 2018	$	—		$	—		$	—		$	27		$	27

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 September 30, 2019 and December 31, 2018 is as follows:

	Carrying Value		Estimated Fair Value
			Level I		Level II		Level III		Total
September 30, 2019
Assets:
Other invested assets, long-term	$	3,914	$	—	$	—	$	3,914	$	3,914
Liabilities:
Debt:
Short-term borrowings	710		—		710		—		710
Commercial paper	500		—		500		—		500
Notes	18,841		—		20,198		—		20,198
Convertible debentures	179		—		893		—		893
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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Capital Stock (Summary of Cash Dividend Activity) (Details) - USD ($) $ / shares in Units, $ in Millions	3 Months Ended						9 Months Ended
	Sep. 30, 2019	Jun. 30, 2019	Mar. 31, 2019	Sep. 30, 2018	Jun. 30, 2018	Mar. 31, 2018	Sep. 30, 2019	Sep. 30, 2018
Capital [Abstract]
Declaration date	Jul. 23, 2019	Apr. 23, 2019	Jan. 29, 2019	Jul. 24, 2018	Apr. 24, 2018	Jan. 30, 2018
Record date	Sep. 10, 2019	Jun. 10, 2019	Mar. 18, 2019	Sep. 10, 2018	Jun. 08, 2018	Mar. 09, 2018
Payment date	Sep. 25, 2019	Jun. 25, 2019	Mar. 29, 2019	Sep. 25, 2018	Jun. 25, 2018	Mar. 23, 2018
Cash dividends per share	$ 0.80	$ 0.80	$ 0.80	$ 0.75	$ 0.75	$ 0.75
Total payment	$ 204	$ 206	$ 206	$ 195	$ 196	$ 192	$ 616	$ 583

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Capital Stock (Fair Values of Options Granted During The Period Estimated Using Weighted-Average Assumptions) (Details)	9 Months Ended
	Sep. 30, 2019	Sep. 30, 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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Accumulated Other Comprehensive Income (Other Comprehensive Income (Loss) Reclassification Adjustments) (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 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	$ 119	$ (45)	$ 705	$ (378)
Reclassification adjustment for net realized loss (gain) on investment securities, net of tax	(3)	9	6	25
Total reclassification adjustment on investments	116	(36)	711	(353)
Non-credit component of other-than-temporary impairments on investments, net of tax	(1)	(2)	(2)	(2)
Cash flow hedges, holding gain (loss), net of tax	(34)	2	(31)	34
Net change in unrecognized periodic benefit costs for defined benefit pension and postretirement benefit plans, net of tax	4	7	10	22
Foreign currency translation adjustment, net of tax	(1)	0	(1)	0
Net gain (loss) recognized in other comprehensive income, net of tax	$ 84	$ (29)	$ 687	$ (299)

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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	Sep. 30, 2019	Dec. 31, 2018
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash equivalents	$ 1,258	$ 1,815
Equity Securities	2,329	1,526
Other invested assets, current	10	21
Securities lending collateral	465	604
Total assets	24,565	21,161
Total liabilities	(1)	(17)
Exchange Traded Funds [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Equity Securities	563	2
Fixed Maturity Mutual Funds [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Equity Securities	631	557
Common Equity Securities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Equity Securities	829	654
Private Equity Securities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Equity Securities	306	313
Fixed Maturities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities	20,478	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	497	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	131	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	4,742	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	9,339	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	4,017	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	90	67
Fixed Maturities [Member] | Other Securities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities	1,662	1,116
Equity Securities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Equity Securities	2,329	1,526
Equity Securities [Member] | Exchange Traded Funds [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Equity Securities	563	2
Equity Securities [Member] | Fixed Maturity Mutual Funds [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Equity Securities	631	557
Equity Securities [Member] | Common Equity Securities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Equity Securities	829	654
Equity Securities [Member] | Private Equity Securities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Equity Securities	306	313
Other Invested Assets, Current [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Other invested assets, current	10	21
Derivatives [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative assets	25	16
Derivative liabilities	(1)	(17)
Level I [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash equivalents	1,258	1,815
Securities lending collateral	0	314
Total assets	2,627	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	1,359	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	563	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	796	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	10	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	465	290
Total assets	21,307	17,783
Total liabilities	(1)	(17)
Level II [Member] | Fixed Maturities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale Securities	20,153	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	497	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	131	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	4,742	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	9,028	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	4,014	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	90	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	1,651	1,099
Level II [Member] | Equity Securities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Equity Securities	664	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	631	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	33	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	25	16
Derivative liabilities	(1)	(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	631	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	325	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	311	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	3	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	11	17
Level III [Member] | Equity Securities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Equity Securities	306	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	306	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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Investments (Gains and Losses Recognized on Equity Securities) (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Schedule of losses and gains related to equity securities [Line Items]
Net realized (losses) gains on equity securities	$ 1	$ 27	$ 90	$ 5
Equity Securities [Member]
Schedule of losses and gains related to equity securities [Line Items]
Net realized (losses) gains on equity securities	(16)	27	75	(33)
Less: Net realized gains recognized on sale of equity securities during the period	(6)	(11)	(55)	(208)
Unrealized gains (losses) recognized on equity securities still held	$ (22)	$ 16	$ 20	$ (241)

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Leases (Narrative) (Details)	9 Months Ended
	Sep. 30, 2019 USD ($)
Lessee, Operating Lease, Not yet Commenced, Description [Abstract]
Lessee, Operating Lease, Lease Not yet Commenced, Term of Contract	12 years
Lessee, Operating Lease, Lease Not yet Commenced, Description	are expected to commence on various dates during 2020 and 2021 when the construction is complete and we take possession of the buildings
Lessee, Operating Lease, Lease Not Yet Commenced Expense	$ 147
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

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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		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Segment Reporting [Abstract]
Reportable segments operating gain	$ 1,528	$ 1,249	$ 4,901	$ 4,676
Net investment income	242	250	737	708
Net realized gains on financial instruments	1	27	90	5
Other-than-temporary impairment losses recognized in income	(13)	(6)	(30)	(18)
Interest expense	(185)	(188)	(556)	(564)
Amortization of other intangible assets	(84)	(91)	(256)	(265)
Gain (loss) on Extinguishment of Debt	0	1	1	(17)
Income before income tax expense	$ 1,489	$ 1,242	$ 4,887	$ 4,525

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Earnings Per Share (Narrative) (Details) - shares shares in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Earnings Per Share [Abstract]
Weighted average shares excluded from denominator for diluted earnings per share because the stock options were anti-dilutive	0.7	0.0	0.6	0.4
Restricted stock units issued under stock incentive plan	0.0	0.0	0.5	0.9
Restricted stock units excluded from the denominator for diluted earnings per share			0.2	0.3

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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	$ 26,503		$ 8,547	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)
Dividends and dividend equivalents	(198)			(198)
Issuance of common stock under employee stock plans, net of related tax benefits, Shares		1.1
Issuance of common stock under employee stock plans, net of related tax benefits	28		28
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
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	3,325
Other comprehensive income (loss)	(299)
Repurchase and retirement of common stock, value	$ (1,192)
Repurchase and retirement of common stock, shares	(5.0)
Balance at Sep. 30, 2018	$ 29,094	$ 3	9,720	20,182	(811)
Balance (in shares) at Sep. 30, 2018		258.9
Balance at Mar. 31, 2018	27,012	$ 3	8,489	19,241	(721)
Balance (in shares) at Mar. 31, 2018		255.5
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income	1,053			1,053
Other comprehensive income (loss)	(61)				(61)
Issuance of common stock under Equity Units stock purchase contracts, shares		6.0
Issuance of common stock under Equity Units stock purchase contracts	1,250		1,250
Repurchase and retirement of common stock, value	(401)	$ 0	(60)	(341)
Repurchase and retirement of common stock, shares		(1.7)
Dividends and dividend equivalents	(197)			(197)
Issuance of common stock under employee stock plans, net of related tax benefits, Shares		0.3
Issuance of common stock under employee stock plans, net of related tax benefits	69		69
Balance at Jun. 30, 2018	28,725	$ 3	9,748	19,756	(782)
Balance (in shares) at Jun. 30, 2018		260.1
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income	960			960
Other comprehensive income (loss)	(29)				(29)
Repurchase and retirement of common stock, value	(397)	$ 0	(58)	(339)
Repurchase and retirement of common stock, shares		(1.6)
Dividends and dividend equivalents	(195)			(195)
Issuance of common stock under employee stock plans, net of related tax benefits, Shares		0.4
Issuance of common stock under employee stock plans, net of related tax benefits	95		95
Convertible debenture repurchases and conversions	(65)		(65)
Balance at Sep. 30, 2018	29,094	$ 3	9,720	20,182	(811)
Balance (in shares) at Sep. 30, 2018		258.9
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)
Dividends and dividend equivalents	(206)			(206)
Issuance of common stock under employee stock plans, net of related tax benefits, Shares		1.1
Issuance of common stock under employee stock plans, net of related tax benefits	69		69
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
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	3,873
Other comprehensive income (loss)	687
Repurchase and retirement of common stock, value	$ (1,396)
Repurchase and retirement of common stock, shares	(5.2)
Balance at Sep. 30, 2019	$ 31,332	$ 3	9,524	22,104	(299)
Balance (in shares) at Sep. 30, 2019		253.8
Balance at Mar. 31, 2019	29,998	$ 3	9,482	21,136	(623)
Balance (in shares) at Mar. 31, 2019		257.4
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income	1,139			1,139
Other comprehensive income (loss)	240				240
Repurchase and retirement of common stock, value	(458)	$ 0	(70)	(388)
Repurchase and retirement of common stock, shares		(1.7)
Dividends and dividend equivalents	(208)			(208)
Issuance of common stock under employee stock plans, net of related tax benefits, Shares		0.2
Issuance of common stock under employee stock plans, net of related tax benefits	91		91
Convertible debenture repurchases and conversions	(9)		(9)
Balance at Jun. 30, 2019	30,793	$ 3	9,494	21,679	(383)
Balance (in shares) at Jun. 30, 2019		255.9
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income	1,183			1,183
Other comprehensive income (loss)	84				84
Repurchase and retirement of common stock, value	(644)	$ 0	(90)	(554)
Repurchase and retirement of common stock, shares		(2.4)
Dividends and dividend equivalents	(204)			(204)
Issuance of common stock under employee stock plans, net of related tax benefits, Shares		0.3
Issuance of common stock under employee stock plans, net of related tax benefits	120		120
Balance at Sep. 30, 2019	$ 31,332	$ 3	$ 9,524	$ 22,104	$ (299)
Balance (in shares) at Sep. 30, 2019		253.8

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Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Millions	Sep. 30, 2019	Dec. 31, 2018
Statement of Financial Position [Abstract]
Available-for-sale fixed maturity securities investments, current, amortized cost	$ 19,267	$ 16,894
Available-for-sale fixed maturity securities investments, long-term, amortized cost	$ 500	$ 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	253,780,229	257,395,577
Common stock, shares outstanding	253,780,229	257,395,577

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Retirement Benefits (Narrative) (Details) - USD ($) $ in Millions	9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018
Defined Benefit Plan, Plan Assets, Contributions by Employer	$ 0	$ 7

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Medical Claims Payable (Narrative) (Details) $ in Millions	Sep. 30, 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	$ 2,709
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	5,697
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	171
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	105
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	30
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	$ 23

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Business Acquisitions Business Acquisition (Assets Liabilities Acquired) (Details) medical_member in Millions, individual_member in Millions, $ in Millions	Sep. 30, 2019 USD ($) medical_member individual_member states	Dec. 31, 2018 USD ($)
Business Acquisition [Line Items]
Number Of Medical Members | medical_member	41
Goodwill	$ 20,500	$ 20,504
Number of States in which Company Operates | states	50
America’s 1st Choice [Member] | Government Business Segment [Member]
Business Acquisition [Line Items]
Goodwill	$ 1,029
Business Acquisition, Goodwill, Expected tax deductible amount	$ 333
Beacon Health Options [Member]
Business Acquisition [Line Items]
Number Of Medical Members | individual_member	40
Number of States in which Company Operates | states	50

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Segment Information (Tables)

9 Months Ended

Sep. 30, 2019

Segment Reporting [Abstract]

Financial Data By Reportable Segment

Financial data by reportable segment for the three and nine months ended September 30, 2019 and 2018 is as follows:

	Commercial & Specialty Business		Government Business		Other			Eliminations			Total
Three Months Ended September 30, 2019
Operating revenue - unaffiliated	$	9,284	$	15,955	$	1,205		$	—		$	26,444
Operating revenue - affiliated	—		—		1,303			(1,303		)	—
Operating gain (loss)	930		616		(18		)	—			1,528
Three Months Ended September 30, 2018
Operating revenue - unaffiliated	$	8,933	$	13,979	$	68		$	—		$	22,980
Operating revenue - affiliated	—		—		330			(330		)	—
Operating gain (loss)	834		456		(41		)	—			1,249
Nine Months Ended September 30, 2019
Operating revenue - unaffiliated	$	28,093	$	46,419	$	1,497		$	—		$	76,009
Operating revenue - affiliated	—		—		2,353			(2,353		)	—
Operating gain (loss)	3,511		1,471		(81		)	—			4,901
Nine Months Ended September 30, 2018
Operating revenue - unaffiliated	$	26,939	$	40,951	$	147		$	—		$	68,037
Operating revenue - affiliated	—		—		961			(961		)	—
Operating gain (loss)	3,284		1,477		(85		)	—			4,676

Major Product Revenue by Segment

The major product revenues for each of the reportable segments for the three and nine months ended September 30, 2019 and 2018 are as follows:

	Three Months Ended   September 30						Nine Months Ended   September 30
	2019			2018			2019			2018
Commercial & Specialty Business
Managed care products	$	7,542		$	7,211		$	22,806		$	21,852
Managed care services	1,330			1,332			4,049			3,913
Dental/Vision products and services	325			306			975			914
Other	87			84			263			260
Total Commercial & Specialty Business	9,284			8,933			28,093			26,939
Government Business
Managed care products	15,847			13,860			46,111			40,610
Managed care services	108			119			308			341
Total Government Business	15,955			13,979			46,419			40,951
Other
Other	2,508			398			3,850			1,108
Eliminations
Eliminations	(1,303		)	(330		)	(2,353		)	(961		)
Total product revenues	$	26,444		$	22,980		$	76,009		$	68,037

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 and nine months ended September 30, 2019 and 2018 is as follows:

	Three Months Ended   September 30						Nine Months Ended   September 30
	2019			2018			2019			2018
Reportable segments’ operating revenue	$	26,444		$	22,980		$	76,009		$	68,037
Net investment income	242			250			737			708
Net realized gains on financial instruments	1			27			90			5
Other-than-temporary impairment losses recognized in income	(13		)	(6		)	(30		)	(18		)
Total revenues	$	26,674		$	23,251		$	76,806		$	68,732

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 and nine months ended September 30, 2019 and 2018 is as follows:

	Three Months Ended   September 30						Nine Months Ended   September 30
	2019			2018			2019			2018
Reportable segments’ operating gain	$	1,528		$	1,249		$	4,901		$	4,676
Net investment income	242			250			737			708
Net realized gains on financial instruments	1			27			90			5
Other-than-temporary impairment losses recognized in income	(13		)	(6		)	(30		)	(18		)
Interest expense	(185		)	(188		)	(556		)	(564		)
Amortization of other intangible assets	(84		)	(91		)	(256		)	(265		)
Gain (loss) on extinguishment of debt	—			1			1			(17		)
Income before income tax expense	$	1,489		$	1,242		$	4,887		$	4,525

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Business Acquisitions

9 Months Ended

Sep. 30, 2019

Business Combinations [Abstract]

Business Acquisitions

Business Acquisitions

Pending Acquisition of Beacon

On June 6, 2019, we announced our entrance into an agreement to acquire Beacon Health Options, Inc., or Beacon, the largest independently held behavioral health organization in the country. Beacon serves approximately forty million individuals across all fifty states. This acquisition aligns with our strategy to diversify into health services and deliver both integrated solutions and care delivery models that personalize care for people with complex and chronic conditions. The acquisition is expected to close late in the fourth quarter of 2019 and is subject to standard closing conditions and customary approvals.

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. Upon the conclusion of our one-year measurement period, the excess of the consideration transferred over the fair value of the net assets acquired resulted in goodwill of $1,029, of which $333 was tax deductible. All of the goodwill was allocated to our Government Business segment. 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.

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Income Taxes

9 Months Ended

Sep. 30, 2019

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

During the three months ended September 30, 2019 and 2018, we recognized income tax expense of $306 and $282, respectively, which represent effective tax rates of 20.6% and 22.7%, respectively. The increase in income tax expense was primarily due to the 2018 remeasurement of deferred tax assets and liabilities against the prior year provisional estimates as required by the Tax Cuts and Jobs Act. The increase in income tax expense was partially offset by the suspension of the non-tax deductible Health Insurance Provider Fee, or HIP Fee, for 2019, which resulted in a decrease in income tax expense of $76. The decrease in the effective tax rate was primarily due to the suspension of the non-tax deductible HIP Fee for 2019.

During the nine months ended September 30, 2019 and 2018, we recognized income tax expense of $1,014 and $1,200, respectively, which represent effective tax rates of 20.7% and 26.5%, respectively. The decrease in income tax expense and effective tax rate was primarily due to the suspension of the non-tax deductible HIP Fee for 2019, which resulted in a decrease in income tax expense of $243.

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Commitments And Contingencies

9 Months Ended

Sep. 30, 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 $700 at September 30, 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 twenty-eight states 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. 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. In April 2019, plaintiffs filed their motions for class certification in conjunction with their supporting expert reports. Defendants filed their motions to exclude plaintiffs’ experts, as well as their opposition to plaintiffs’ motions for class certification, in July 2019. The case has been stayed until January 2020. 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. The Superior Court has scheduled trial for March 23, 2020. The parties are currently engaged in discovery and are in the process of retaining experts. 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 we entered into 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. Discovery is scheduled to be completed in December 2019. 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 but has not yet been decided. 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 November 25, 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 us and our 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. 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 reimbursement 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. CVS Health began 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. 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 September 30, 2019.

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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		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Segment Reporting [Abstract]
Reportable segments operating revenues	$ 26,444	$ 22,980	$ 76,009	$ 68,037
Net investment income	242	250	737	708
Net realized gains on financial instruments	1	27	90	5
Other-than-temporary impairment losses recognized in income	(13)	(6)	(30)	(18)
Total revenues	$ 26,674	$ 23,251	$ 76,806	$ 68,732

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Earnings Per Share (Denominator For Basic And Diluted Earnings Per Share) (Details) - shares shares in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Earnings Per Share [Abstract]
Denominator for basic earnings per share - weighted-average shares	255.2	259.5	256.3	258.0
Effect of dilutive securities – employee stock options, nonvested restricted stock awards, convertible debentures and equity units	4.8	5.9	4.8	6.3
Denominator for diluted earnings per share	260.0	265.4	261.1	264.3

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Leases (Reconciliation of Future Lease Payments to Total Lease Liabilities) (Details) $ in Millions	Sep. 30, 2019 USD ($)
Leases (Reconciliation of Future Lease Payments to Total Lease Liabilities) [Abstract]
Operating lease payments, 2019; excluding nine months ended September 30, 2019	$ 60
Operating lease payments, 2020	163
Operating lease payments, 2021	133
Operating lease payments, 2022	121
Operating lease payments, 2023	103
Operating lease payments, Thereafter	79
Total future minimum payments	659
Imputed Interest, Leases	(19)
Operating Lease Liabilities	$ 640

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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						9 Months Ended
	Sep. 30, 2019	Jun. 30, 2019	Mar. 31, 2019	Sep. 30, 2018	Jun. 30, 2018	Mar. 31, 2018	Sep. 30, 2019	Sep. 30, 2018
Medical Claims Payable [Line Items]
Gross medical claims payable, beginning of period			$ 7,266			$ 7,814	$ 7,266	$ 7,814
Ceded medical claims payable, beginning of period			(34)			(105)	(34)	(105)
Net medical claims payable, beginning of period			7,232			7,709	7,232	7,709
Business combinations and purchase adjustments				$ 199				199
Current period net incurred medical claims							58,157	51,396
Prior periods redundancies							(437)	(858)
Total net incurred medical claims	$ 19,897	$ 19,484	18,339	17,411	$ 16,923	16,204	57,720	50,538
Net payments attributable to current period medical claims							49,751	44,511
Net payments attributable to prior periods medical claims							6,466	6,504
Total net payments							56,217	51,015
Short duration contract liability for unpaid claims and adjustment expense, Net	8,735			7,431			8,735	7,431
Ceded medical claims payable, end of period	35			37			35	37
Gross medical claims payable, end of period	8,770			7,468			8,770	7,468
Government Business Segment [Member]
Medical Claims Payable [Line Items]
Gross medical claims payable, beginning of period			4,680			4,431	4,680	4,431
Ceded medical claims payable, beginning of period			(24)			(27)	(24)	(27)
Net medical claims payable, beginning of period			4,656			4,404	4,656	4,404
Business combinations and purchase adjustments				199				199
Current period net incurred medical claims							39,171	33,664
Prior periods redundancies							(275)	(434)
Total net incurred medical claims	13,351	13,062	12,483	11,397	11,039	10,794	38,896	33,230
Net payments attributable to current period medical claims							33,474	29,236
Net payments attributable to prior periods medical claims							4,253	3,833
Total net payments							37,727	33,069
Short duration contract liability for unpaid claims and adjustment expense, Net	5,825			4,764			5,825	4,764
Ceded medical claims payable, end of period	27			27			27	27
Gross medical claims payable, end of period	5,852			4,791			5,852	4,791
Commercial Specialty Business Segment [Member]
Medical Claims Payable [Line Items]
Gross medical claims payable, beginning of period			2,586			3,383	2,586	3,383
Ceded medical claims payable, beginning of period			(10)			(78)	(10)	(78)
Net medical claims payable, beginning of period			2,576			3,305	2,576	3,305
Business combinations and purchase adjustments				0				0
Current period net incurred medical claims							18,986	17,732
Prior periods redundancies							(162)	(424)
Total net incurred medical claims	6,546	$ 6,422	$ 5,856	6,014	$ 5,884	$ 5,410	18,824	17,308
Net payments attributable to current period medical claims							16,277	15,275
Net payments attributable to prior periods medical claims							2,213	2,671
Total net payments							18,490	17,946
Short duration contract liability for unpaid claims and adjustment expense, Net	2,910			2,667			2,910	2,667
Ceded medical claims payable, end of period	8			10			8	10
Gross medical claims payable, end of period	$ 2,918			$ 2,677			$ 2,918	$ 2,677

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Debt (Convertible Debenture Details) (Details) $ / shares in Units, $ in Millions	9 Months Ended
	Sep. 30, 2019 USD ($) $ / shares	Dec. 31, 2018 USD ($)
Debt Instrument [Line Items]
Net debt carrying amount	$ 893	$ 1,030
Convertible Debt [Member]
Debt Instrument [Line Items]
Outstanding principal amount	267
Unamortized debt discount	85
Net debt carrying amount	179
Equity component carrying amount	$ 97
Conversion rate (shares of common stock per $1,000 of principal)	13.9250
Effective conversion price (per $1,000 of principal amount) per share | $ / shares	$ 71.8129

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Consolidated Statements Of Cash Flows - USD ($) $ in Millions	9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018
Operating activities
Net income	$ 3,873	$ 3,325
Adjustments to reconcile net income to net cash provided by operating activities:
Net realized gains on financial instruments	(90)	(5)
Other-than-temporary impairment losses recognized in income	30	18
(Gain) Loss on extinguishment of debt	(1)	17
Loss on disposal of assets	1	2
Deferred income taxes	(29)	141
Amortization, net of accretion	778	752
Depreciation expense	109	92
Share-based compensation	226	135
Changes in operating assets and liabilities:
Receivables, net	(880)	(823)
Other invested assets	(30)	(17)
Other assets	(280)	(734)
Policy liabilities	1,394	(556)
Unearned income	46	(42)
Accounts payable and accrued expenses	(931)	756
Other liabilities	675	190
Income taxes	(81)	273
Other, net	(76)	(160)
Net cash provided by operating activities	4,734	3,364
Investing activities
Purchases of fixed maturity securities	(7,616)	(6,790)
Proceeds from fixed maturity securities:
Sales	3,919	4,971
Maturities, calls and redemptions	1,583	1,442
Purchases of equity securities	(9,408)	(812)
Proceeds from sales of equity securities	8,671	2,119
Purchases of other invested assets	(286)	(324)
Proceeds from sales of other invested assets	242	251
Changes in securities lending collateral	139	(286)
Purchases of subsidiaries, net of cash acquired	0	(1,732)
Purchases of property and equipment	(726)	(888)
Other, net	(33)	17
Net cash used in investing activities	(3,515)	(2,032)
Financing activities
Net repayments of commercial paper borrowings	(197)	(54)
Proceeds from long-term borrowings	2,473	835
Repayments of long-term borrowings	(923)	(1,393)
Proceeds from short-term borrowings	6,480	5,300
Repayments of short-term borrowings	(6,915)	(5,305)
Changes in securities lending payable	(139)	287
Changes in bank overdrafts	250	97
Proceeds from issuance of common stock under Equity Units stock purchase contracts	0	1,250
Repurchase and retirement of common stock	(1,396)	(1,192)
Change in collateral and settlements of debt-related derivatives	(34)	22
Cash dividends	(616)	(583)
Proceeds from issuance of common stock under employee stock plans	137	133
Taxes paid through withholding of common stock under employee stock plans	(82)	(77)
Net cash used in financing activities	(962)	(680)
Effect of foreign exchange rates on cash and cash equivalents	(1)	(1)
Change in cash and cash equivalents	256	651
Cash and cash equivalents at beginning of period	3,934	3,609
Cash and cash equivalents at end of period	$ 4,190	$ 4,260

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Consolidated Balance Sheets - USD ($) $ in Millions	Sep. 30, 2019	Dec. 31, 2018
Current assets:
Cash and cash equivalents	$ 4,190	$ 3,934
Fixed maturity securities, current (amortized cost of $19,267 and $16,894)	19,960	16,692
Equity securities, current	2,300	1,493
Other invested assets, current	10	21
Accrued investment income	168	162
Premium receivables	4,782	4,465
Self-funded receivables	2,555	2,278
Other receivables	2,870	2,558
Income taxes receivable	91	10
Securities lending collateral	465	604
Other current assets	2,113	2,104
Total current assets	39,504	34,321
Long-term investments:
Fixed maturity securities (amortized cost of $500 and $486)	518	487
Equity securities	29	33
Other invested assets	3,914	3,726
Property and equipment, net	2,921	2,735
Goodwill	20,500	20,504
Other intangible assets	8,756	9,007
Other noncurrent assets	1,667	758
Total assets	77,809	71,571
Policy Liabilities
Medical claims payable	8,977	7,454
Reserves for future policy benefits	77	75
Other policyholder liabilities	2,503	2,590
Total policy liabilities	11,557	10,119
Unearned income	948	902
Accounts payable and accrued expenses	4,445	4,959
Security trades pending payable	542	197
Securities lending payable	465	604
Short-term borrowings	710	1,145
Current portion of long-term debt	700	849
Other current liabilities	3,867	3,190
Total current liabilities	23,234	21,965
Long-term debt, less current portion	18,820	17,217
Reserves for future policy benefits, noncurrent	661	706
Deferred tax liabilities, net	2,140	1,960
Other noncurrent liabilities	1,622	1,182
Total liabilities	46,477	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 – 253,780,229 and 257,395,577	3	3
Additional paid-in capital	9,524	9,536
Retained earnings	22,104	19,988
Accumulated other comprehensive loss	(299)	(986)
Total shareholders' equity	31,332	28,541
Total liabilities and shareholders' equity	$ 77,809	$ 71,571

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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	9 Months Ended
	Mar. 31, 2018	Sep. 30, 2019	Jan. 01, 2019	Dec. 31, 2018	Jan. 01, 2018
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Operating Lease Liabilities		$ 640
Cumulative effect of new accounting principle in period of adoption				$ 26
Customer funds and cash and cash equivalents on deposit for regulatory requirements		$ 242		$ 222
Approximate percentage of revenues subject to new revenue guidance under ASC 606		6.00%
Accounting Standards Update 2016-02 [Member]
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Operating Lease, Right-of-Use Asset			$ 637
Operating Lease Liabilities			728
Cumulative effect of new accounting principle in period of adoption			$ 26
Accounting Standards Update 2018-02 [Member]
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Adoption of ASU 2018-02	$ 91
Accounting Standards Update 2016-01 [Member]
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Cumulative effect of new accounting principle in period of adoption					$ 320

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Earnings Per Share (Tables)

9 Months Ended

Sep. 30, 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 and nine months ended September 30, 2019 and 2018 is as follows:

	Three Months Ended   September 30		Nine Months Ended   September 30
	2019	2018	2019	2018
Denominator for basic earnings per share – weighted-average shares	255.2	259.5	256.3	258.0
Effect of dilutive securities – employee stock options, nonvested restricted stock awards, convertible debentures and equity units	4.8	5.9	4.8	6.3
Denominator for diluted earnings per share	260.0	265.4	261.1	264.3

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Capital Stock

9 Months Ended

Sep. 30, 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 nine months ended September 30, 2019 and 2018 is as follows: 

Declaration Date	Record Date	Payment Date	Cash Dividend per Share	Total
Nine Months Ended September 30, 2019
January 29, 2019	March 18, 2019	March 29, 2019	$0.80	$	206
April 23, 2019	June 10, 2019	June 25, 2019	$0.80	$	206
July 23, 2019	September 10, 2019	September 25, 2019	$0.80	$	204
Nine Months Ended September 30, 2018
January 30, 2018	March 9, 2018	March 23, 2018	$0.75	$	192
April 24, 2018	June 8, 2018	June 25, 2018	$0.75	$	196
July 24, 2018	September 10, 2018	September 25, 2018	$0.75	$	195

On October 22, 2019, our Audit Committee declared a fourth quarter 2019 dividend to shareholders of $0.80 per share, payable on December 20, 2019 to shareholders of record at the close of business on December 5, 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 October 1, 2019 through October 16, 2019 (subsequent to September 30, 2019) and for the nine months ended September 30, 2019 and 2018 is as follows:

	October 1, 2019   Through   October 16, 2019		Nine Months Ended September 30
			2019		2018
Shares repurchased	0.4		5.2		5.0
Average price per share	$	238.71	$	270.42	$	240.15
Aggregate cost	$	104	$	1,396	$	1,192
Authorization remaining at the end of the period	$	3,994	$	4,098	$	5,986

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 nine months ended September 30, 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		306.74
Exercised	(0.9	)	127.92
Forfeited or expired	(0.1	)	238.81
Outstanding at September 30, 2019	3.4		185.47		6.28	$	233
Exercisable at September 30, 2019	2.2		142.26		5.02	$	220

A summary of the nonvested restricted stock activity, including restricted stock units, for the nine months ended September 30, 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		306.13
Vested	(0.8	)	152.97
Forfeited	—		243.77
Nonvested at September 30, 2019	1.4		240.92

During the nine months ended September 30, 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 nine months ended September 30, 2019 and 2018:

	Nine Months Ended September 30
	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 nine months ended September 30, 2019 and 2018: 

	Nine Months Ended September 30
	2019		2018
Options granted during the period	$	68.69	$	55.44
Restricted stock awards granted during the period	306.13		233.27

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Investments

9 Months Ended

Sep. 30, 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 and nine months ended September 30, 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 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 September 30, 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
September 30, 2019
Fixed maturity securities:
United States Government securities	$	487	$	10	$	—		$	—		$	497	$	—
Government sponsored securities	125		6		—			—			131		—
States, municipalities and political subdivisions	4,469		275		(1		)	(1		)	4,742		—
Corporate securities	9,040		341		(17		)	(25		)	9,339		(5		)
Residential mortgage-backed securities	3,914		111		(4		)	(4		)	4,017		—
Commercial mortgage-backed securities	87		3		—			—			90		—
Other securities	1,645		24		(2		)	(5		)	1,662		—
Total fixed maturity securities	$	19,767	$	770	$	(24	)	$	(35	)	$	20,478	$	(5	)
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	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 September 30, 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
September 30, 2019
Fixed maturity securities:
United States Government securities	8	$	49	$	—		5	$	14	$	—
Government sponsored securities	6	5		—			3	1		—
States, municipalities and political subdivisions	66	108		(1		)	16	13		(1		)
Corporate securities	455	711		(17		)	338	509		(25		)
Residential mortgage-backed securities	228	422		(4		)	215	323		(4		)
Commercial mortgage-backed securities	1	3		—			4	8		—
Other securities	190	483		(2		)	107	332		(5		)
Total fixed maturity securities	954	$	1,781	$	(24	)	688	$	1,200	$	(35	)
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	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 September 30, 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	$	628	$	628
Due after one year through five years	5,569		5,701
Due after five years through ten years	5,504		5,731
Due after ten years	4,065		4,311
Mortgage-backed securities	4,001		4,107
Total fixed maturity securities	$	19,767	$	20,478

Proceeds from sales, maturities, calls or redemptions of fixed maturity securities and the related gross realized gains and gross realized losses for the three and nine months ended September 30, 2019 and 2018 are as follows:

	Three Months Ended   September 30						Nine Months Ended   September 30
	2019			2018			2019			2018
Proceeds	$	2,048		$	1,532		$	5,502		$	6,413
Gross realized gains	26			12			66			73
Gross realized losses	(9		)	(16		)	(43		)	(85		)

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 September 30, 2019 and December 31, 2018 is as follows:

	September 30, 2019		December 31, 2018
Equity securities:
Exchange traded funds	$	563	$	2
Fixed maturity mutual funds	631		557
Common equity securities	829		654
Private equity securities	306		313
Total	$	2,329	$	1,526

The gains and losses related to equity securities for the three and nine months ended September 30, 2019 and 2018 are as follows:

	Three Months Ended September 30						Nine Months Ended September 30
	2019			2018			2019			2018
Net realized (losses) gains recognized on equity securities	$	(16	)	$	27		$	75		$	(33	)
Less: Net realized gains recognized on equity securities sold during the period	(6		)	(11		)	(55		)	(208		)
Unrealized (losses) gains recognized on equity securities still held at September 30	$	(22	)	$	16		$	20		$	(241	)

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 $465 and $604 at September 30, 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 September 30, 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 September 30, 2019 is as follows:

	Overnight and Continuous
Securities lending transactions
United States Government securities	$	132
Corporate securities	324
Equity securities	9
Total	$	465

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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Retirement Benefits

9 Months Ended

Sep. 30, 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 September 30, 2019 and 2018 are as follows:

	Pension Benefits						Other Benefits
	Three Months Ended   September 30						Three Months Ended   September 30
	2019			2018			2019			2018
Service cost	$	—		$	2		$	1		$	—
Interest cost	15			14			3			4
Expected return on assets	(35		)	(37		)	(6		)	(6		)
Recognized actuarial loss	5			6			1			1
Settlement loss	4			6			—			—
Amortization of prior service credit	—			—			(3		)	(3		)
Net periodic benefit credit	$	(11	)	$	(9	)	$	(4	)	$	(4	)

The components of net periodic benefit credit included in our consolidated statements of income for the nine months ended September 30, 2019 and 2018 are as follows:

	Pension Benefits						Other Benefits
	Nine Months Ended   September 30						Nine Months Ended   September 30
	2019			2018			2019			2018
Service cost	$	—		$	6		$	1		$	1
Interest cost	47			41			11			11
Expected return on assets	(104		)	(110		)	(17		)	(18		)
Recognized actuarial loss	13			18			2			3
Settlement loss	8			19			—			—
Amortization of prior service credit	—			—			(9		)	(9		)
Net periodic benefit credit	$	(36	)	$	(26	)	$	(12	)	$	(12	)

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. Contributions of $0 and $7 were made to our retirement benefit plans during the nine months ended September 30, 2019 and 2018.

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Leases

9 Months Ended

Sep. 30, 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.

The information related to our leases is as follows:

	Balance Sheet Location	September 30, 2019
Operating Leases
Right-of-use assets	Other noncurrent assets	$	577
Lease liabilities, current	Other current liabilities	167
Lease liabilities, noncurrent	Other noncurrent liabilities	473

	Three Months Ended September 30, 2019			Nine Months Ended September 30, 2019
Lease Expense
Operating lease expense	$	48		$	138
Short-term lease expense	9			33
Sublease income	(4		)	(12		)
Total lease expense	$	53		$	159
Other information
Operating cash paid for amounts included in the measurement of lease liabilities, operating leases	$	43		$	132
Right-of-use assets obtained in exchange for new lease liabilities, operating leases	$	33		$	33
Weighted average remaining lease term, operating leases	6 years			6 years
Weighted average discount rate, operating leases	3.96		%	3.96		%

At September 30, 2019, future lease payments for noncancellable operating leases with initial or remaining terms of one year or more are as follows:

2019 (excluding the nine months ended September 30, 2019)	$	60
2020	163
2021	133
2022	121
2023	103
Thereafter	79
Total future minimum payments	659
Less imputed interest	(19		)
Total lease liabilities	$	640

As of September 30, 2019, we have additional operating leases for building spaces that have not yet commenced, and some building spaces are being constructed by the lessors and their agents. These leases have terms of up to 12 years and are expected to commence on various dates during 2020 and 2021 when the construction is complete and we take possession of the buildings. The undiscounted lease payments for these leases, which are not included in the tables above, aggregate $147.

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Retirement Benefits (Tables)

9 Months Ended

Sep. 30, 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 September 30, 2019 and 2018 are as follows:

	Pension Benefits						Other Benefits
	Three Months Ended   September 30						Three Months Ended   September 30
	2019			2018			2019			2018
Service cost	$	—		$	2		$	1		$	—
Interest cost	15			14			3			4
Expected return on assets	(35		)	(37		)	(6		)	(6		)
Recognized actuarial loss	5			6			1			1
Settlement loss	4			6			—			—
Amortization of prior service credit	—			—			(3		)	(3		)
Net periodic benefit credit	$	(11	)	$	(9	)	$	(4	)	$	(4	)

The components of net periodic benefit credit included in our consolidated statements of income for the nine months ended September 30, 2019 and 2018 are as follows:

	Pension Benefits						Other Benefits
	Nine Months Ended   September 30						Nine Months Ended   September 30
	2019			2018			2019			2018
Service cost	$	—		$	6		$	1		$	1
Interest cost	47			41			11			11
Expected return on assets	(104		)	(110		)	(17		)	(18		)
Recognized actuarial loss	13			18			2			3
Settlement loss	8			19			—			—
Amortization of prior service credit	—			—			(9		)	(9		)
Net periodic benefit credit	$	(36	)	$	(26	)	$	(12	)	$	(12	)

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Accumulated Other Comprehensive Income (Loss) Accumulated Other Comprehensive Income Reclassification Adjustments (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Accumulated Other Comprehensive Income (Loss) Reclassification Adjustments (Parantheticals) [Abstract]
Net holding gain (loss) on investment securities arising during the period, tax (expense) benefit	$ (35)	$ 12	$ (205)	$ 109
Reclassification adjustment for net realized loss (gain) on investment securities, tax (benefit) expense	1	(3)	(1)	(7)
Other than Temporary Impairment Losses, Investments, Portion in Other Comprehensive Loss, Net of Tax, Including Portion Attributable to Noncontrolling Interest, Available-for-sale Securities	0	2	0	2
Cash flow hedges, holding gain (loss), tax (expense) benefit	(2)	(1)	(2)	(9)
Net change in unrecognized periodic benefit costs for defined benefit pension and postretirement benefit plans, tax expense	(1)	(2)	(3)	(7)
Other Comprehensive Income (Loss), Foreign Currency Translation Adjustment, Tax	0	0	0	(1)
Net gain (loss) recognized in other comprehensive income, tax (expense) benefit	$ (37)	$ 4	$ (211)	$ 83

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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						9 Months Ended
	Oct. 16, 2019	Sep. 30, 2019	Jun. 30, 2019	Mar. 31, 2019	Sep. 30, 2018	Jun. 30, 2018	Mar. 31, 2018	Sep. 30, 2019	Sep. 30, 2018
Equity, Class of Treasury Stock [Line Items]
Shares repurchased								5.2	5.0
Average price per share								$ 270.42	$ 240.15
Aggregate cost		$ 644	$ 458	$ 294	$ 397	$ 401	$ 394	$ 1,396	$ 1,192
Authorization remaining at the end of the period		$ 4,098			$ 5,986			$ 4,098	$ 5,986
Subsequent Event [Member]
Equity, Class of Treasury Stock [Line Items]
Shares repurchased	0.4
Average price per share	$ 238.71
Aggregate cost	$ 104
Authorization remaining at the end of the period	$ 3,994

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Capital Stock (Schedule Of Weighted-Average Fair Values Determined For The Periods) (Details) - $ / shares	9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018
Capital [Abstract]
Options granted during the period	$ 68.69	$ 55.44
Restricted stock awards granted during the period	$ 306.13	$ 233.27

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Derivative Financial Instruments (Financial Statement Narrative) (Details) - USD ($) $ in Millions	Sep. 30, 2019	Dec. 31, 2018	Sep. 30, 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	$ (277)		$ (249)
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	$ (277)	$ (246)

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Investments (Current and Long-term Equity Securities) (Details) - USD ($) $ in Millions	Sep. 30, 2019	Dec. 31, 2018
Investment [Line Items]
Equity Securities	$ 2,329	$ 1,526
Exchange Traded Funds [Member]
Investment [Line Items]
Equity Securities	563	2
Fixed Maturity Mutual Funds [Member]
Investment [Line Items]
Equity Securities	631	557
Common Equity Securities [Member]
Investment [Line Items]
Equity Securities	829	654
Private Equity Securities [Member]
Investment [Line Items]
Equity Securities	$ 306	$ 313

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Organization

9 Months Ended

Sep. 30, 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 41 medical members through our affiliated health plans as of September 30, 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 plans; traditional indemnity plans and other hybrid plans, including Consumer-Driven Health Plans, 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 our Federal Health Products & Services business.

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 30 counties 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 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. Also, beginning in the second quarter of 2019, we provide pharmacy benefits management services through our IngenioRx subsidiary. We are licensed to conduct insurance operations in all 50 states and the District of Columbia through our subsidiaries.

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Retirement Benefits (Components Of Net Periodic (Benefit Credit) Benefit Cost) (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Pension Benefits [Member]
Defined Benefit Plan Disclosure [Line Items]
Service cost	$ 0	$ 2	$ 0	$ 6
Interest cost	15	14	47	41
Expected return on assets	(35)	(37)	(104)	(110)
Recognized actuarial loss	5	6	13	18
Settlement loss	4	6	8	19
Amortization of prior service cost (credit)	0	0	0	0
Net periodic benefit credit	(11)	(9)	(36)	(26)
Other Postretirement Benefits Plan [Member]
Defined Benefit Plan Disclosure [Line Items]
Service cost	1	0	1	1
Interest cost	3	4	11	11
Expected return on assets	(6)	(6)	(17)	(18)
Recognized actuarial loss	1	1	2	3
Settlement loss	0	0	0	0
Amortization of prior service cost (credit)	(3)	(3)	(9)	(9)
Net periodic benefit credit	$ (4)	$ (4)	$ (12)	$ (12)

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Medical Claims Payable Medical Claims Payable (Reconciliation of the Claims Development to the Claims Liability) (Details) - USD ($) $ in Millions	Sep. 30, 2019	Dec. 31, 2018	Sep. 30, 2018	Dec. 31, 2017
Short-duration Insurance Contracts, Reconciliation of Claims Development to Liability [Line Items]
Net medical claims payable, end of period	$ 8,735	$ 7,232		$ 7,709
Ceded medical claims payable end of period	35	34	$ 37	105
Insurance lines other than short duration	207
Gross medical claims payable, end of period	8,977	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	2,910	2,576		3,305
Ceded medical claims payable end of period	8	10	10	78
Insurance lines other than short duration	0
Gross medical claims payable, end of period	2,918
Government Business Segment [Member]
Short-duration Insurance Contracts, Reconciliation of Claims Development to Liability [Line Items]
Net medical claims payable, end of period	5,825	4,656		4,404
Ceded medical claims payable end of period	27	$ 24	$ 27	$ 27
Insurance lines other than short duration	207
Gross medical claims payable, end of period	$ 6,059

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Consolidated Statements Of Income - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Revenues
Premiums	$ 23,793	$ 21,451	$ 70,137	$ 63,602
Administrative fees and other revenue	2,651	1,529	5,872	4,435
Total operating revenue	26,444	22,980	76,009	68,037
Net investment income	242	250	737	708
Net realized gains on financial instruments	1	27	90	5
Other-than-temporary impairment losses on investments:
Total other-than-temporary impairment losses on investments	(14)	(8)	(36)	(20)
Portion of other-than-temporary impairment losses recognized in other comprehensive income	1	2	6	2
Other-than-temporary impairment losses recognized in income	(13)	(6)	(30)	(18)
Total revenues	26,674	23,251	76,806	68,732
Expenses
Benefit expense	20,753	18,185	60,403	52,959
Cost of products sold	745	0	843	0
Selling, general and administrative expense	3,418	3,546	9,862	10,402
Interest expense	185	188	556	564
Amortization of other intangible assets	84	91	256	265
(Gain) loss on extinguishment of debt	0	(1)	(1)	17
Total expenses	25,185	22,009	71,919	64,207
Income before income tax expense	1,489	1,242	4,887	4,525
Income tax expense	306	282	1,014	1,200
Net income	$ 1,183	$ 960	$ 3,873	$ 3,325
Net income per share
Basic net income per share	$ 4.64	$ 3.70	$ 15.11	$ 12.89
Diluted net income per share	4.55	3.62	14.83	12.58
Dividends per share	$ 0.80	$ 0.75	$ 2.40	$ 2.25

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Commitments And Contingencies (Details) $ in Millions	9 Months Ended
	Sep. 30, 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	700
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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Segment Information Segment Information (Narrative) (Details)	9 Months Ended
	Sep. 30, 2019 segment
Segment Reporting, Disclosure of Entity's Reportable Segments [Abstract]
Number of Reportable Segments	3

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Segment Information (Financial Data By Reportable Segment) (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Segment Reporting Information [Line Items]
Reportable segments operating revenues	$ 26,444	$ 22,980	$ 76,009	$ 68,037
Operating gain (loss)	1,528	1,249	4,901	4,676
Commercial & Specialty [Member]
Segment Reporting Information [Line Items]
Operating gain (loss)	930	834	3,511	3,284
Government Business [Member]
Segment Reporting Information [Line Items]
Operating gain (loss)	616	456	1,471	1,477
Other [Member]
Segment Reporting Information [Line Items]
Operating gain (loss)	(18)	(41)	(81)	(85)
Intersegment Eliminations [Member]
Segment Reporting Information [Line Items]
Reportable segments operating revenues	(1,303)	(330)	(2,353)	(961)
Unaffiliated
Segment Reporting Information [Line Items]
Reportable segments operating revenues	26,444	22,980	76,009	68,037
Unaffiliated | Commercial & Specialty [Member]
Segment Reporting Information [Line Items]
Reportable segments operating revenues	9,284	8,933	28,093	26,939
Unaffiliated | Government Business [Member]
Segment Reporting Information [Line Items]
Reportable segments operating revenues	15,955	13,979	46,419	40,951
Unaffiliated | Other [Member]
Segment Reporting Information [Line Items]
Reportable segments operating revenues	1,205	68	1,497	147
Affiliated [Member]
Segment Reporting Information [Line Items]
Reportable segments operating revenues	0	0	0	0
Affiliated [Member] | Commercial & Specialty [Member]
Segment Reporting Information [Line Items]
Reportable segments operating revenues	0	0	0	0
Affiliated [Member] | Government Business [Member]
Segment Reporting Information [Line Items]
Reportable segments operating revenues	0	0	0	0
Affiliated [Member] | Other [Member]
Segment Reporting Information [Line Items]
Reportable segments operating revenues	$ 1,303	$ 330	$ 2,353	$ 961

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Fair Value

9 Months Ended

Sep. 30, 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 with quoted market prices are designated as Level I. 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 September 30, 2019 and December 31, 2018 is as follows:

	Level I		Level II			Level III		Total
September 30, 2019
Assets:
Cash equivalents	$	1,258	$	—		$	—	$	1,258
Fixed maturity securities, available-for-sale:
United States Government securities	—		497			—		497
Government sponsored securities	—		131			—		131
States, municipalities and political subdivisions	—		4,742			—		4,742
Corporate securities	—		9,028			311		9,339
Residential mortgage-backed securities	—		4,014			3		4,017
Commercial mortgage-backed securities	—		90			—		90
Other securities	—		1,651			11		1,662
Total fixed maturity securities, available-for-sale	—		20,153			325		20,478
Equity securities:
Exchange traded funds	563		—			—		563
Fixed maturity mutual funds	—		631			—		631
Common equity securities	796		33			—		829
Private equity securities	—		—			306		306
Total equity securities	1,359		664			306		2,329
Other invested assets, current	10		—			—		10
Securities lending collateral	—		465			—		465
Derivatives	—		25			—		25
Total assets	$	2,627	$	21,307		$	631	$	24,565
Liabilities:
Derivatives	$	—	$	(1	)	$	—	$	(1	)
Total liabilities	$	—	$	(1	)	$	—	$	(1	)
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	—		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 September 30, 2019 and 2018 is as follows:

	Corporate Securities			Residential Mortgage- backed Securities		Other  Securities			Equity Securities			Total
Three Months Ended September 30, 2019
Beginning balance at July 1, 2019	$	297		$	3	$	11		$	305		$	616
Total gains (losses):
Recognized in net income	(3		)	—		—			(5		)	(8		)
Recognized in accumulated other comprehensive loss	12			—		—			—			12
Purchases	28			—		—			25			53
Sales	(9		)	—		—			(19		)	(28		)
Settlements	(18		)	—		—			—			(18		)
Transfers into Level III	4			—		—			—			4
Transfers out of Level III	—			—		—			—			—
Ending balance at September 30, 2019	$	311		$	3	$	11		$	306		$	631
Change in unrealized losses included in net income related to assets still held at September 30, 2019	$	—		$	—	$	—		$	(4	)	$	(4	)
Three Months Ended September 30, 2018
Beginning balance at July 1, 2018	$	304		$	4	$	26		$	312		$	646
Total gains (losses):
Recognized in net income	—			—		—			4			4
Recognized in accumulated other comprehensive loss	(1		)	—		—			—			(1		)
Purchases	32			—		3			5			40
Sales	(2		)	—		—			(3		)	(5		)
Settlements	(30		)	—		—			—			(30		)
Transfers into Level III	6			—		1			—			7
Transfers out of Level III	(2		)	—		(13		)	—			(15		)
Ending balance at September 30, 2018	$	307		$	4	$	17		$	318		$	646
Change in unrealized gains included in net income related to assets still held at September 30, 2018	$	—		$	—	$	—		$	9		$	9

A reconciliation of the beginning and ending balances of assets measured at fair value on a recurring basis using Level III inputs for the nine months ended September 30, 2019 and 2018 is as follows:

	Corporate Securities			Residential Mortgage- backed Securities			Other  Securities			Equity Securities			Total
Nine Months Ended September 30, 2019
Beginning balance at January 1, 2019	$	287		$	6		$	17		$	313		$	623
Total (losses) gains:
Recognized in net income	(7		)	—			—			(5		)	(12		)
Recognized in accumulated other comprehensive loss	14			—			—			—			14
Purchases	91			—			2			46			139
Sales	(11		)	—			—			(48		)	(59		)
Settlements	(58		)	(1		)	(2		)	—			(61		)
Transfers into Level III	4			—			3			—			7
Transfers out of Level III	(9		)	(2		)	(9		)	—			(20		)
Ending balance at September 30, 2019	$	311		$	3		$	11		$	306		$	631
Change in unrealized losses included in net income related to assets still held at September 30, 2019	$	—		$	—		$	—		$	(4	)	$	(4	)
Nine Months Ended September 30, 2018
Beginning balance at January 1, 2018	$	229		$	5		$	16		$	287		$	537
Total (losses) gains:
Recognized in net income	1			—			—			(228		)	(227		)
Recognized in accumulated other comprehensive loss	(3		)	—			—			—			(3		)
Purchases	94			—			12			263			369
Sales	(17		)	—			—			(4		)	(21		)
Settlements	(60		)	(1		)	(1		)	—			(62		)
Transfers into Level III	65			—			5			—			70
Transfers out of Level III	(2		)	—			(15		)	—			(17		)
Ending balance at September 30, 2018	$	307		$	4		$	17		$	318		$	646
Change in unrealized gains included in net income related to assets still held at September 30, 2018	$	—		$	—		$	—		$	27		$	27

There were no individually material transfers into or out of Level III during the three and nine months ended September 30, 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 and nine months ended September 30, 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 and nine months ended September 30, 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 and cash equivalents, 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 September 30, 2019 and December 31, 2018 is as follows:

	Carrying Value		Estimated Fair Value
			Level I		Level II		Level III		Total
September 30, 2019
Assets:
Other invested assets, long-term	$	3,914	$	—	$	—	$	3,914	$	3,914
Liabilities:
Debt:
Short-term borrowings	710		—		710		—		710
Commercial paper	500		—		500		—		500
Notes	18,841		—		20,198		—		20,198
Convertible debentures	179		—		893		—		893
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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Debt

9 Months Ended

Sep. 30, 2019

Debt Disclosure [Abstract]

Debt

Debt

We generally issue senior unsecured notes for long-term borrowing purposes. At September 30, 2019 and December 31, 2018, we had $18,816 and $17,153, respectively, outstanding under these notes.

On September 9, 2019, we issued $850 aggregate principal amount of 2.375% Notes due 2025, or the 2025 Notes, $825 aggregate principal amount of 2.875% Notes due 2029, or the 2029 Notes, and $825 aggregate principal amount of 3.700% Notes due 2049, or the 2049 Notes, under our shelf registration statement. Interest on the 2025 Notes is payable semi-annually in arrears on January 15 and July 15 of each year, commencing January 15, 2020. Interest on the 2029 Notes and the 2049 Notes is payable semi-annually in arrears on March 15 and September 15 each year, commencing March 15, 2020. The proceeds are being used for working capital and general corporate purposes, including, but not limited to, the repurchase of our common stock pursuant to our share repurchase program, repayment of short-term and long-term debt and to fund acquisitions.

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 6.0 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 $18. At the remarketing, we also issued $850 aggregate 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 September 30, 2019 and December 31, 2018.

We have a senior revolving credit facility, or the 5-Year Facility, with a group of lenders for general corporate purposes. In June 2019, we amended and restated the credit agreement for the 5-Year Facility to, among other things, extend the maturity date of the 5-Year Facility from August 2020 to June 2024 and decreased the amount of credit available under the 5-Year Facility from $3,500 to $2,500. In June 2019, we also entered into a 364-day senior revolving credit facility, or 364-Day Facility, with a group of lenders for general corporate purposes, which provides for credit in the amount of $1,000 and matures in June 2020. There were no amounts outstanding under the 5-Year Facility or the 364-Day Facility at any time during the nine months ended September 30, 2019 or under the 5-Year Facility at December 31, 2018.

Through certain subsidiaries, we have entered into multiple 364-day lines of credit, or the Subsidiary Credit Facilities, with separate lenders for general corporate purposes. The Subsidiary Credit Facilities provide combined credit of up to $600. At September 30, 2019 and December 31, 2018, $150 and $500, respectively, were outstanding under our Subsidiary Credit Facilities.

We have an authorized commercial paper program of up to $3,500, the proceeds of which may be used for general corporate purposes. In August 2019, we increased the amount available under the commercial paper program from $2,500 to $3,500. At September 30, 2019 and December 31, 2018, we had $500 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 nine months ended September 30, 2019, $20 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 $73. 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 September 30, 2019 the related balances, conversion rate and conversion price of the Debentures:

Outstanding principal amount	$	267
Unamortized debt discount	$	85
Net debt carrying amount	$	179
Equity component carrying amount	$	97
Conversion rate (shares of common stock per $1,000 of principal amount)	13.9250
Effective conversion price (per $1,000 of principal amount)	$	71.8129

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 $560 and $645 in outstanding short-term borrowings from FHLBs, at September 30, 2019 and December 31, 2018 with fixed interest rates of 1.990% and 2.458% respectively.

All debt is a direct obligation of Anthem, Inc., except for the surplus note, the FHLB borrowings, and the Subsidiary Credit Facilities.

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Investments (Current And Long-Term Fixed Maturity Securities, Available-For-Sale) (Details) - USD ($) $ in Millions	9 Months Ended	12 Months Ended
	Sep. 30, 2019	Dec. 31, 2018	Sep. 30, 2018
Investments [Line Items]
Gross Unrealized Gains	$ 770		$ 170
Fixed Maturities [Member]
Investments [Line Items]
Cost or Amortized Cost	19,767	$ 17,380
Gross Unrealized Gains	770	173
Gross Unrealized Losses, Less than 12 Months	(24)	(184)
Gross Unrealized Losses, 12 Months or Greater	(35)	(190)
Available-for-sale Securities	20,478	17,179
Non-Credit Component of Other-Than-Temporary Impairments Recognized in Accumulated Other Comprehensive Income	(5)	(3)
Fixed Maturities [Member] | United States Government Securities [Member]
Investments [Line Items]
Cost or Amortized Cost	487	414
Gross Unrealized Gains	10	3
Gross Unrealized Losses, Less than 12 Months	0	0
Gross Unrealized Losses, 12 Months or Greater	0	(1)
Available-for-sale Securities	497	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	125	108
Gross Unrealized Gains	6	1
Gross Unrealized Losses, Less than 12 Months	0	0
Gross Unrealized Losses, 12 Months or Greater	0	(1)
Available-for-sale Securities	131	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	4,469	4,716
Gross Unrealized Gains	275	91
Gross Unrealized Losses, Less than 12 Months	(1)	(3)
Gross Unrealized Losses, 12 Months or Greater	(1)	(19)
Available-for-sale Securities	4,742	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	9,040	8,189
Gross Unrealized Gains	341	33
Gross Unrealized Losses, Less than 12 Months	(17)	(170)
Gross Unrealized Losses, 12 Months or Greater	(25)	(115)
Available-for-sale Securities	9,339	7,937
Non-Credit Component of Other-Than-Temporary Impairments Recognized in Accumulated Other Comprehensive Income	(5)	(3)
Fixed Maturities [Member] | Residential Mortgage-Backed Securities [Member]
Investments [Line Items]
Cost or Amortized Cost	3,914	2,769
Gross Unrealized Gains	111	31
Gross Unrealized Losses, Less than 12 Months	(4)	(3)
Gross Unrealized Losses, 12 Months or Greater	(4)	(47)
Available-for-sale Securities	4,017	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	87	69
Gross Unrealized Gains	3	0
Gross Unrealized Losses, Less than 12 Months	0	0
Gross Unrealized Losses, 12 Months or Greater	0	(2)
Available-for-sale Securities	90	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	1,645	1,115
Gross Unrealized Gains	24	14
Gross Unrealized Losses, Less than 12 Months	(2)	(8)
Gross Unrealized Losses, 12 Months or Greater	(5)	(5)
Available-for-sale Securities	1,662	1,116
Non-Credit Component of Other-Than-Temporary Impairments Recognized in Accumulated Other Comprehensive Income	$ 0	$ 0

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Leases (Tables)

9 Months Ended

Sep. 30, 2019

Leases [Abstract]

Lessee, Operating Lease, Disclosure [Table Text Block]

The information related to our leases is as follows:

	Balance Sheet Location	September 30, 2019
Operating Leases
Right-of-use assets	Other noncurrent assets	$	577
Lease liabilities, current	Other current liabilities	167
Lease liabilities, noncurrent	Other noncurrent liabilities	473

	Three Months Ended September 30, 2019			Nine Months Ended September 30, 2019
Lease Expense
Operating lease expense	$	48		$	138
Short-term lease expense	9			33
Sublease income	(4		)	(12		)
Total lease expense	$	53		$	159
Other information
Operating cash paid for amounts included in the measurement of lease liabilities, operating leases	$	43		$	132
Right-of-use assets obtained in exchange for new lease liabilities, operating leases	$	33		$	33
Weighted average remaining lease term, operating leases	6 years			6 years
Weighted average discount rate, operating leases	3.96		%	3.96		%

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

At September 30, 2019, future lease payments for noncancellable operating leases with initial or remaining terms of one year or more are as follows:

2019 (excluding the nine months ended September 30, 2019)	$	60
2020	163
2021	133
2022	121
2023	103
Thereafter	79
Total future minimum payments	659
Less imputed interest	(19		)
Total lease liabilities	$	640

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Capital Stock (Tables)

9 Months Ended

Sep. 30, 2019

Capital [Abstract]

Summary of Cash Dividend Activity

A summary of the cash dividend activity for the nine months ended September 30, 2019 and 2018 is as follows: 

Declaration Date	Record Date	Payment Date	Cash Dividend per Share	Total
Nine Months Ended September 30, 2019
January 29, 2019	March 18, 2019	March 29, 2019	$0.80	$	206
April 23, 2019	June 10, 2019	June 25, 2019	$0.80	$	206
July 23, 2019	September 10, 2019	September 25, 2019	$0.80	$	204
Nine Months Ended September 30, 2018
January 30, 2018	March 9, 2018	March 23, 2018	$0.75	$	192
April 24, 2018	June 8, 2018	June 25, 2018	$0.75	$	196
July 24, 2018	September 10, 2018	September 25, 2018	$0.75	$	195

Summary of Share Repurchases

A summary of common stock repurchases from October 1, 2019 through October 16, 2019 (subsequent to September 30, 2019) and for the nine months ended September 30, 2019 and 2018 is as follows:

	October 1, 2019   Through   October 16, 2019		Nine Months Ended September 30
			2019		2018
Shares repurchased	0.4		5.2		5.0
Average price per share	$	238.71	$	270.42	$	240.15
Aggregate cost	$	104	$	1,396	$	1,192
Authorization remaining at the end of the period	$	3,994	$	4,098	$	5,986

Summary of Stock Option Activity

A summary of stock option activity for the nine months ended September 30, 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		306.74
Exercised	(0.9	)	127.92
Forfeited or expired	(0.1	)	238.81
Outstanding at September 30, 2019	3.4		185.47		6.28	$	233
Exercisable at September 30, 2019	2.2		142.26		5.02	$	220

Summary of Nonvested Restricted Stock Activity Including Restricted Stock Units

A summary of the nonvested restricted stock activity, including restricted stock units, for the nine months ended September 30, 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		306.13
Vested	(0.8	)	152.97
Forfeited	—		243.77
Nonvested at September 30, 2019	1.4		240.92

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 nine months ended September 30, 2019 and 2018:

	Nine Months Ended September 30
	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 nine months ended September 30, 2019 and 2018: 

	Nine Months Ended September 30
	2019		2018
Options granted during the period	$	68.69	$	55.44
Restricted stock awards granted during the period	306.13		233.27

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Earnings Per Share

9 Months Ended

Sep. 30, 2019

Earnings Per Share [Abstract]

Earnings Per Share

Earnings per Share

The denominator for basic and diluted earnings per share for the three and nine months ended September 30, 2019 and 2018 is as follows:

	Three Months Ended   September 30		Nine Months Ended   September 30
	2019	2018	2019	2018
Denominator for basic earnings per share – weighted-average shares	255.2	259.5	256.3	258.0
Effect of dilutive securities – employee stock options, nonvested restricted stock awards, convertible debentures and equity units	4.8	5.9	4.8	6.3
Denominator for diluted earnings per share	260.0	265.4	261.1	264.3

During the three months ended September 30, 2019 and 2018, weighted-average shares related to certain stock options of 0.7 and 0.0, respectively, were excluded from the denominator for diluted earnings per share because the stock options were anti-dilutive. During each of the nine months ended September 30, 2019 and 2018, weighted-average shares related to certain stock options of 0.6 and 0.4, respectively, were excluded from the denominator for diluted earnings per share because the stock options were anti-dilutive.

During the three and nine months ended September 30, 2019, we issued approximately 0.0 and 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 and nine months ended September 30, 2018, we issued approximately 0.0 and 0.9 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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Investments (Tables)

9 Months Ended

Sep. 30, 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 September 30, 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
September 30, 2019
Fixed maturity securities:
United States Government securities	$	487	$	10	$	—		$	—		$	497	$	—
Government sponsored securities	125		6		—			—			131		—
States, municipalities and political subdivisions	4,469		275		(1		)	(1		)	4,742		—
Corporate securities	9,040		341		(17		)	(25		)	9,339		(5		)
Residential mortgage-backed securities	3,914		111		(4		)	(4		)	4,017		—
Commercial mortgage-backed securities	87		3		—			—			90		—
Other securities	1,645		24		(2		)	(5		)	1,662		—
Total fixed maturity securities	$	19,767	$	770	$	(24	)	$	(35	)	$	20,478	$	(5	)
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	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 September 30, 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
September 30, 2019
Fixed maturity securities:
United States Government securities	8	$	49	$	—		5	$	14	$	—
Government sponsored securities	6	5		—			3	1		—
States, municipalities and political subdivisions	66	108		(1		)	16	13		(1		)
Corporate securities	455	711		(17		)	338	509		(25		)
Residential mortgage-backed securities	228	422		(4		)	215	323		(4		)
Commercial mortgage-backed securities	1	3		—			4	8		—
Other securities	190	483		(2		)	107	332		(5		)
Total fixed maturity securities	954	$	1,781	$	(24	)	688	$	1,200	$	(35	)
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	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 September 30, 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	$	628	$	628
Due after one year through five years	5,569		5,701
Due after five years through ten years	5,504		5,731
Due after ten years	4,065		4,311
Mortgage-backed securities	4,001		4,107
Total fixed maturity securities	$	19,767	$	20,478

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 and nine months ended September 30, 2019 and 2018 are as follows:

	Three Months Ended   September 30						Nine Months Ended   September 30
	2019			2018			2019			2018
Proceeds	$	2,048		$	1,532		$	5,502		$	6,413
Gross realized gains	26			12			66			73
Gross realized losses	(9		)	(16		)	(43		)	(85		)

Investments In Equity Securities

A summary of current and long-term marketable equity securities at September 30, 2019 and December 31, 2018 is as follows:

	September 30, 2019		December 31, 2018
Equity securities:
Exchange traded funds	$	563	$	2
Fixed maturity mutual funds	631		557
Common equity securities	829		654
Private equity securities	306		313
Total	$	2,329	$	1,526

Gains (Losses) Related to Equity Securities

The gains and losses related to equity securities for the three and nine months ended September 30, 2019 and 2018 are as follows:

	Three Months Ended September 30						Nine Months Ended September 30
	2019			2018			2019			2018
Net realized (losses) gains recognized on equity securities	$	(16	)	$	27		$	75		$	(33	)
Less: Net realized gains recognized on equity securities sold during the period	(6		)	(11		)	(55		)	(208		)
Unrealized (losses) gains recognized on equity securities still held at September 30	$	(22	)	$	16		$	20		$	(241	)

Securities Lending Programs

The remaining contractual maturity of our securities lending agreements at September 30, 2019 is as follows:

	Overnight and Continuous
Securities lending transactions
United States Government securities	$	132
Corporate securities	324
Equity securities	9
Total	$	465

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Debt (Tables)

9 Months Ended

Sep. 30, 2019

Debt Disclosure [Abstract]

Convertible Debenture Terms

The following table summarizes at September 30, 2019 the related balances, conversion rate and conversion price of the Debentures:

Outstanding principal amount	$	267
Unamortized debt discount	$	85
Net debt carrying amount	$	179
Equity component carrying amount	$	97
Conversion rate (shares of common stock per $1,000 of principal amount)	13.9250
Effective conversion price (per $1,000 of principal amount)	$	71.8129

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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		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Beginning balance	$ 616	$ 646	$ 623	$ 537
Total gains (losses) recognized in net income	(8)	4	(12)	(227)
Total gains (losses) recognized in accumulated other comprehensive loss	12	(1)	14	(3)
Purchases	53	40	139	369
Sales	(28)	(5)	(59)	(21)
Settlements	(18)	(30)	(61)	(62)
Transfers into Level III	4	7	7	70
Transfers out of Level III	0	(15)	(20)	(17)
Ending balance	631	646	631	646
Change in unrealized losses included in net income related to assets still held	(4)	9	(4)	27
Corporate Securities [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Beginning balance	297	304	287	229
Total gains (losses) recognized in net income	(3)	0	(7)	1
Total gains (losses) recognized in accumulated other comprehensive loss	12	(1)	14	(3)
Purchases	28	32	91	94
Sales	(9)	(2)	(11)	(17)
Settlements	(18)	(30)	(58)	(60)
Transfers into Level III	4	6	4	65
Transfers out of Level III	0	(2)	(9)	(2)
Ending balance	311	307	311	307
Change in unrealized losses included in net income related to assets still held	0	0	0	0
Residential Mortgage-Backed Securities [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Beginning balance	3	4	6	5
Total gains (losses) recognized in net income	0	0	0	0
Total gains (losses) recognized in accumulated other comprehensive loss	0	0	0	0
Purchases	0	0	0	0
Sales	0	0	0	0
Settlements	0	0	(1)	(1)
Transfers into Level III	0	0	0	0
Transfers out of Level III	0	0	(2)	0
Ending balance	3	4	3	4
Change in unrealized losses included in net income related to assets still held	0	0	0	0
Other Securities [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Beginning balance	11	26	17	16
Total gains (losses) recognized in net income	0	0	0	0
Total gains (losses) recognized in accumulated other comprehensive loss	0	0	0	0
Purchases	0	3	2	12
Sales	0	0	0	0
Settlements	0	0	(2)	(1)
Transfers into Level III	0	1	3	5
Transfers out of Level III	0	(13)	(9)	(15)
Ending balance	11	17	11	17
Change in unrealized losses included in net income related to assets still held	0	0	0	0
Equity Securities [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Beginning balance	305	312	313	287
Total gains (losses) recognized in net income	(5)	4	(5)	(228)
Total gains (losses) recognized in accumulated other comprehensive loss	0	0	0	0
Purchases	25	5	46	263
Sales	(19)	(3)	(48)	(4)
Settlements	0	0	0	0
Transfers into Level III	0	0	0	0
Transfers out of Level III	0	0	0	0
Ending balance	306	318	306	318
Change in unrealized losses included in net income related to assets still held	$ (4)	$ 9	$ (4)	$ 27

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Investments (Securities Lending Programs) (Details) - USD ($) $ in Millions	Sep. 30, 2019	Dec. 31, 2018
Transfer of Certain Financial Assets Accounted for as Secured Borrowings [Line Items]
Collateral received for securities loaned, at carrying value	$ 465	$ 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	465
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	132
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	324
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	$ 9

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Investments (Amortized Cost And Fair Value Of Fixed Maturity Securities, By Contractual Maturity) (Details) - Fixed Maturities [Member] - USD ($) $ in Millions	Sep. 30, 2019	Dec. 31, 2018
Schedule of Investments [Line Items]
Due in one year or less, Amortized Cost	$ 628
Due after one year through five years, Amortized Cost	5,569
Due after five years through ten years, Amortized Cost	5,504
Due after ten years, Amortized Cost	4,065
Mortgage-backed securities, Amortized Cost	4,001
Available-for-sale securities, Amortized Cost	19,767	$ 17,380
Due in one year or less, Estimated Fair Value	628
Due after one year through five years, Estimated Fair Value	5,701
Due after five years through ten years, Estimated Fair Value	5,731
Due after ten years, Estimated Fair Value	4,311
Mortgage-backed securities, Estimated Fair Value	4,107
Available-for-sale securities, Estimated Fair Value	$ 20,478	$ 17,179

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Capital Stock (Nonvested Restricted Stock Activity Including Restricted Stock Units) (Details) - $ / shares shares in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 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	0.0	0.0	0.5	0.9
Vested, Restricted Stock Shares And Units			(0.8)
Forfeited, Restricted Stock Shares And Units			0.0
Nonvested at Ending Balance, Restricted Stock Shares and Units	1.4		1.4
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			306.13	$ 233.27
Vested, Weighted-Average Grant Date Fair Value per Share			152.97
Forfeited, Weighted-Average Grant Date Fair Value per Share			243.77
Nonvested at Ending Balance, Weighted-Average Grant Date Fair Value per Share	$ 240.92		$ 240.92

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Accumulated Other Comprehensive Loss (Reconciliation Of The Components Of Accumulated Other Comprehensive Income) (Details) - USD ($) $ in Millions	9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Dec. 31, 2018
Available-for-sale Securities, Accumulated Gross Unrealized Gain, before Tax	$ 770	$ 170
Available-for-sale Securities, Accumulated Gross Unrealized Loss, before Tax	(54)	(289)
Investments, net pretax unrealized gains (losses) excluding non-credit component of other-than-temporary impairments	716	(119)
Deferred tax (liability) asset	(164)	24
Net unrealized gains (losses) on investments excluding non-credit component of other-than-temporary impairments	552	(95)
Non-credit component of other than temporary impairments on investments, unrealized losses	(5)	(2)
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	(4)	(2)
Cash flow hedges, gross unrealized losses	(340)	(315)
Cash flow hedges, deferred tax asset	63	66
Net unrealized losses on cash flow hedges	(277)	(249)
Defined benefit pension plans, deferred net actuarial loss	(730)	(587)
Defined benefit pension plans, deferred prior service credits	(1)	(1)
Defined benefit pension plans, deferred tax asset	188	153
Net unrecognized periodic benefit costs for defined benefit pension plans	(543)	(435)
Postretirement benefit plans, deferred net actuarial loss	(57)	(75)
Postretirement beneft plans, prior service costs	25	37
Postretirement benefit plans, deferred tax asset	8	10
Net unrecognized periodic benefit costs for postretirement benefit plans	(24)	(28)
Foreign currency translation adjustments, gross unrealized losses	(4)	(2)
Foreign currency translation adjustments, deferred tax asset	1	0
Net unrealized losses on foreign currency translation adjustments	(3)	(2)
Accumulated other comprehensive loss	$ (299)	$ (811)	$ (986)

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Medical Claims Payable (Tables)

9 Months Ended

Sep. 30, 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 nine months ended September 30, 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	18,986			39,171			58,157
Prior periods redundancies	(162		)	(275		)	(437		)
Total net incurred medical claims	18,824			38,896			57,720
Net payments attributable to:
Current period medical claims	16,277			33,474			49,751
Prior periods medical claims	2,213			4,253			6,466
Total net payments	18,490			37,727			56,217
Net medical claims payable, end of period	2,910			5,825			8,735
Ceded medical claims payable, end of period	8			27			35
Gross medical claims payable, end of period	$	2,918		$	5,852		$	8,770

At September 30, 2019, the total of net incurred but not reported liabilities plus expected development on reported claims for the Commercial & Specialty Business was $30, $171 and $2,709 for the claim years 2017 and prior, 2018 and 2019, respectively.

At September 30, 2019, the total of net incurred but not reported liabilities plus expected development on reported claims for the Government Business was $23, $105 and $5,697 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 nine months ended September 30, 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	17,732			33,664			51,396
Prior periods redundancies	(424		)	(434		)	(858		)
Total net incurred medical claims	17,308			33,230			50,538
Net payments attributable to:
Current period medical claims	15,275			29,236			44,511
Prior periods medical claims	2,671			3,833			6,504
Total net payments	17,946			33,069			51,015
Net medical claims payable, end of period	2,667			4,764			7,431
Ceded medical claims payable, end of period	10			27			37
Gross medical claims payable, end of period	$	2,677		$	4,791		$	7,468

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 for periods in 2019 are as follows:

	Three Months Ended						Nine Months Ended   September 30, 2019
	March 31, 2019		June 30, 2019		September 30, 2019
Net incurred medical claims:
Commercial & Specialty Business	$	5,856	$	6,422	$	6,546	$	18,824
Government Business	12,483		13,062		13,351		38,896
Total net incurred medical claims	18,339		19,484		19,897		57,720
Quality improvement and other claims expense	943		884		856		2,683
Benefit expense	$	19,282	$	20,368	$	20,753	$	60,403

Net incurred medical claims for the three months ended March 31, 2019 and June 30, 2019 in the table above include a reclassification between the Commercial and Specialty Business and Government Business segments to adjust certain intercompany eliminations. This reclassification did not impact any other amounts presented in the consolidated financial statements.

The reconciliation of net incurred medical claims to benefit expense included in our consolidated statements of income for periods in 2018 are as follows:

	Three Months Ended						Nine Months Ended   September 30, 2018
	March 31, 2018		June 30, 2018		September 30, 2018
Net incurred medical claims:
Commercial & Specialty Business	$	5,410	$	5,884	$	6,014	$	17,308
Government Business	10,794		11,039		11,397		33,230
Total net incurred medical claims	16,204		16,923		17,411		50,538
Quality improvement and other claims expense	842		805		774		2,421
Benefit expense	$	17,046	$	17,728	$	18,185	$	52,959

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 September 30, 2019, is as follows:

	Commercial & Specialty Business		Government Business		Total
Net medical claims payable, end of period	$	2,910	$	5,825	$	8,735
Ceded medical claims payable, end of period	8		27		35
Insurance lines other than short duration	—		207		207
Gross medical claims payable, end of period	$	2,918	$	6,059	$	8,977

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Accumulated Other Comprehensive Income

9 Months Ended

Sep. 30, 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 September 30, 2019 and 2018 is as follows:

	September 30
	2019			2018
Investments, excluding non-credit component of other-than-temporary impairments:
Gross unrealized gains	$	770		$	170
Gross unrealized losses	(54		)	(289		)
Net pre-tax unrealized gains (losses)	716			(119		)
Deferred tax (liability) asset	(164		)	24
Net unrealized gains (losses) on investments	552			(95		)
Non-credit components of other-than-temporary impairments on investments:
Unrealized losses	(5		)	(2		)
Deferred tax asset	1			—
Net unrealized non-credit component of other-than-temporary impairments on investments	(4		)	(2		)
Cash flow hedges:
Gross unrealized losses	(340		)	(315		)
Deferred tax asset	63			66
Net unrealized losses on cash flow hedges	(277		)	(249		)
Defined benefit pension plans:
Deferred net actuarial loss	(730		)	(587		)
Deferred prior service credits	(1		)	(1		)
Deferred tax asset	188			153
Net unrecognized periodic benefit costs for defined benefit pension plans	(543		)	(435		)
Postretirement benefit plans:
Deferred net actuarial loss	(57		)	(75		)
Deferred prior service costs	25			37
Deferred tax asset	8			10
Net unrecognized periodic benefit costs for postretirement benefit plans	(24		)	(28		)
Foreign currency translation adjustments:
Gross unrealized losses	(4		)	(2		)
Deferred tax asset	1			—
Net unrealized losses on foreign currency translation adjustments	(3		)	(2		)
Accumulated other comprehensive loss	$	(299	)	$	(811	)

Other comprehensive income (loss) reclassification adjustments for the three months ended September 30, 2019 and 2018 are as follows:

	Three Months Ended September 30
	2019			2018
Investments:
Net holding gain (loss) on investment securities arising during the period, net of tax (expense) benefit of ($35) and $12, respectively	$	119		$	(45	)
Reclassification adjustment for net realized (gain) loss on investment securities, net of tax expense (benefit) of $1 and ($3), respectively	(3		)	9
Total reclassification adjustment on investments	116			(36		)
Non-credit component of other-than-temporary impairments on investments:
Non-credit component of other-than-temporary impairments on investments, net of tax expense of ($0) and ($2), respectively	(1		)	(2		)
Cash flow hedges:
Holding (loss) gain, net of tax expense of ($2) and ($1), respectively	(34		)	2
Other:
Net change in unrecognized periodic benefit costs for defined benefit pension and postretirement benefit plans, net of tax expense of ($1) and ($2), respectively	4			7
Foreign currency translation adjustment, net of tax expense of ($0) and ($0), respectively	(1		)	—
Net gain (loss) recognized in other comprehensive income, net of tax (expense) benefit of ($37) and $4, respectively	$	84		$	(29	)

Other comprehensive income (loss) reclassification adjustments for the nine months ended September 30, 2019 and 2018 are as follows:

	Nine Months Ended September 30
	2019			2018
Investments:
Net holding gain (loss) on investment securities arising during the period, net of tax (expense) benefit of ($205) and $109, respectively	$	705		$	(378	)
Reclassification adjustment for net realized (gain) loss on investment securities, net of tax benefit of $(1) and $(7), respectively	6			25
Total reclassification adjustment on investments	711			(353		)
Non-credit component of other-than-temporary impairments on investments:
Non-credit component of other-than-temporary impairments on investments, net of tax expense of ($0) and ($2), respectively	(2		)	(2		)
Cash flow hedges:
Holding (loss) gain, net of tax expense of ($2) and ($9), respectively	(31		)	34
Other:
Net change in unrecognized periodic benefit costs for defined benefit pension and postretirement benefit plans, net of tax expense of ($3) and ($7), respectively	10			22
Foreign currency translation adjustment, net of tax expense of ($0) and ($1), respectively	(1		)	—
Net gain (loss) recognized in other comprehensive income, net of tax (expense) benefit of ($211) and $83, respectively	$	687		$	(299	)

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Basis of Presentation and Significant Accounting Policies (Policies)

9 Months Ended

Sep. 30, 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. For additional information on prior year reclassifications, see Note 15, “Segment Information.” 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 and nine months ended September 30, 2019 and 2018 have been recorded. The results of operations for the three and nine months ended September 30, 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 $242 and $222 at September 30, 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, any amounts probable of being owed under any residual value guarantees and discount rate determined at lease commencement. As our leases do not generally 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, the 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 as of September 30, 2019. 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. Beginning in the second quarter of 2019, administrative fees and other revenues also include unaffiliated revenue from services performed by IngenioRx. 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 September 30, 2019. For the three and nine months ended September 30, 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 consolidated 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 entirety of ASU 2018-13 or only the provisions that eliminate or modify disclosure 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 allowed 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 sheets. The adoption of ASU 2018-02 did not have any impact on our consolidated 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 ASC 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 the old guidance, the premium was 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 consolidated results of operations, cash flows or 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 versus 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 represent 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, or on our consolidated results of operations, cash flows or 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 Flows, 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 consolidated results of operations or 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 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 sheets. 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 May 2019, the FASB issued Accounting Standards Update No. 2019-05, Financial Instruments - Credit Losses (Topic 326): Targeted Transition Relief, or ASU 2019-05. In April 2019, the FASB issued Accounting Standards Update No. 2019-04, Codification Improvements to Topic 326, Financial Instruments -

Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments. In November 2018, the FASB issued Accounting Standards Update No. 2018-19, Codification Improvements to Topic 326, Financial Instruments - Credit Losses. These updates provide an option to irrevocably elect to measure certain individual financial assets at fair value instead of amortized cost and 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 requires a cumulative-effect adjustment to the statement of financial position to the opening balance of retained earnings at the date of adoption and a prospective transition approach for debt securities for which an other-than-temporary impairment had been recognized before the adoption date. The effect of a prospective transition approach is to maintain the same amortized cost basis before and after the date of adoption. ASU 2016-13 is effective for us on January 1, 2020, with early adoption permitted. We are currently gathering data and evaluating the effects the adoption of ASU 2016-13 will have on our consolidated financial statements.

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. While we are continuing to evaluate the effects the adoption of ASU 2018-15 will have on our consolidated financial position, results of operations and cash flows; we intend to apply the prospective method of adoption.

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 (Narrative) (Details) - USD ($) $ in Millions	9 Months Ended	12 Months Ended
	Sep. 30, 2019	Dec. 31, 2018
Schedule of Investments [Line Items]
Fair value of collateral received at time of securities lending transactions	$ 465	$ 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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Investments (Proceeds and Realized Gains Losses From Fixed Maturity Securities) (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Debt Securities, Available-for-sale [Line Items]
Proceeds	$ 2,048	$ 1,532	$ 5,502	$ 6,413
Gross realized gains	26	12	66	73
Gross realized losses	$ (9)	$ (16)	$ (43)	$ (85)

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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	Sep. 30, 2019	Dec. 31, 2018
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Other invested assets, long-term	$ 3,914	$ 3,726
Short-term borrowings	710	1,145
Commercial paper	500	697
Notes	20,198	17,145
Convertible debentures	893	1,030
Fair Value, Recurring [Member] | Level III [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Other invested assets, long-term	3,914	3,726
Short-term borrowings	0	0
Commercial paper	0	0
Notes	0	0
Convertible debentures	0	0
Fair Value, Recurring [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	710	1,145
Commercial paper	500	697
Notes	20,198	17,145
Convertible debentures	893	1,030
Fair Value, Recurring [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
Fair Value, Nonrecurring [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Other invested assets, long-term	3,914	3,726
Short-term borrowings	710	1,145
Commercial paper	500	697
Notes	18,841	17,178
Convertible debentures	$ 179	$ 191

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Capital Stock (Summary of Stock Option Activity) (Details) $ / shares in Units, shares in Millions, $ in Millions	9 Months Ended
	Sep. 30, 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	(0.9)
Forfeited or expired, Number of Shares | shares	(0.1)
Outstanding at end of period, Number of Shares | shares	3.4
Exercisable at end of period, Number of Shares | shares	2.2
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	306.74
Exercised, Weighted-Average Option Price per Share | $ / shares	127.92
Forfeited or expired, Weighted-Average Option Price per Share | $ / shares	238.81
Outstanding at end of period, Weighted-Average Option Price per Share | $ / shares	185.47
Exercisable at end of period, Weighted-Average Option Price per Share | $ / shares	$ 142.26
Outstanding at end of period, Weighted-Average Remaining Contractual Life	6 years 3 months 10 days
Exercisable at end of period, Weighted-Average Remaining Contractual Life	5 years 7 days
Outstanding at end of period, Aggregate Intrinsic Value | $	$ 233
Exercisable at end of period, Aggregate Intrinsic Value | $	$ 220

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Capital Stock (Narrative) (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions		3 Months Ended						9 Months Ended
	Dec. 20, 2019	Sep. 30, 2019	Jun. 30, 2019	Mar. 31, 2019	Sep. 30, 2018	Jun. 30, 2018	Mar. 31, 2018	Sep. 30, 2019	Dec. 07, 2017
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Dividends Payable, Date to be Paid		Sep. 25, 2019	Jun. 25, 2019	Mar. 29, 2019	Sep. 25, 2018	Jun. 25, 2018	Mar. 23, 2018
Dividends Payable, Date of Record		Sep. 10, 2019	Jun. 10, 2019	Mar. 18, 2019	Sep. 10, 2018	Jun. 08, 2018	Mar. 09, 2018
Increase In Stock Repurchase Program Authorization									$ 5,000
Subsequent Event [Member]
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Dividends Payable, Amount Per Share	$ 0.80
Dividends Payable, Date to be Paid	Dec. 20, 2019
Dividends Payable, Date of Record	Dec. 05, 2019
2019 to 2021 [Member] | Restricted Stock Units (RSUs) [Member]
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross								0.2

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Consolidated Statements of Comprehensive Income - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Statement of Comprehensive Income [Abstract]
Net income	$ 1,183	$ 960	$ 3,873	$ 3,325
Other comprehensive income (loss), net of tax:
Change in net unrealized gains/losses on investments	116	(36)	711	(353)
Change in non-credit component of other-than-temporary impairment losses on investments	(1)	(2)	(2)	(2)
Change in net unrealized losses on cash flow hedges	(34)	2	(31)	34
Change in net periodic pension and postretirement costs	4	7	10	22
Foreign currency translation adjustments	(1)	0	(1)	0
Other comprehensive income (loss)	84	(29)	687	(299)
Total comprehensive income	$ 1,267	$ 931	$ 4,560	$ 3,026

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Document And Entity Information Document - shares	9 Months Ended
	Sep. 30, 2019	Oct. 16, 2019
Entity Information [Line Items]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Sep. 30, 2019
Document Transition Report	false
Amendment Flag	false
Document Fiscal Year Focus	2019
Document Fiscal Period Focus	Q3
Current Fiscal Year End Date	--12-31
Entity Central Index Key	0001156039
Entity File Number	001-16751
Entity Registrant Name	ANTHEM, INC.
Entity Incorporation, State or Country Code	IN
Entity Tax Identification Number	35-2145715
Entity Address, Address Line One	220 Virginia Avenue
Entity Address, City or Town	Indianapolis
Entity Address, State or Province	IN
Entity Address, Postal Zip Code	46204
City Area Code	800
Local Phone Number	331-1476
Title of 12(b) Security	Common Stock, $0.01 par value
Trading Symbol	ANTM
Security Exchange Name	NYSE
Entity Current Reporting Status	Yes
Entity Filer Category	Large Accelerated Filer
Entity Interactive Data Current	Yes
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		253,563,697

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Debt (Narrative) (Details) - USD ($)		3 Months Ended		9 Months Ended
	May 01, 2018	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018	Sep. 09, 2019	Jun. 30, 2019	Mar. 31, 2019	Dec. 31, 2018	Mar. 02, 2018	May 12, 2015
Debt Instrument [Line Items]
Repayments of Long-term Debt				$ 923,000,000	$ 1,393,000,000
Gain (Loss) on extinguishment of debt		$ 0	$ 1,000,000	1,000,000	(17,000,000)
Short-term borrowings		710,000,000		710,000,000					$ 1,145,000,000
Commercial paper		500,000,000		500,000,000					697,000,000
Equity Unit Purchase Agreements [Member]
Debt Instrument [Line Items]
Equity Units Issued											25,000,000
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
Equity Units Stock Purchase Contracts Settlement Rate	0.2412
Issuance of common stock under Equity Units stock purchase contracts, shares	6,000,000.0
Convertible Debt [Member]
Debt Instrument [Line Items]
Repurchased Face Amount				20,000,000
Repayments of Long-term Debt				73,000,000
Gain (Loss) on extinguishment of debt				1,000,000
Lines of Credit [Member]
Debt Instrument [Line Items]
Maximum borrowing capacity		600,000,000		600,000,000
Short-term borrowings		150,000,000		150,000,000					500,000,000
Federal Home Loan Bank Advances [Member]
Debt Instrument [Line Items]
Federal Home Loan Bank, advances, short-term		$ 560,000,000		$ 560,000,000					$ 645,000,000
Debt instrument interest rate		1.99%		1.99%					2.458%
Surplus Notes [Member]
Debt Instrument [Line Items]
Long-term Debt		$ 25,000,000		$ 25,000,000					$ 25,000,000
Remarketable Subordinated Notes [Member]
Debt Instrument [Line Items]
Remarketable subordinated notes tendered, cash payment					4,000,000
Gain (Loss) on extinguishment of debt					$ (18,000,000)
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%
Senior Unsecured Notes [Member]
Debt Instrument [Line Items]
Long-term Debt		18,816,000,000		18,816,000,000					17,153,000,000
Senior Unsecured Notes [Member] | Two Point Three Seven Five Due Two Thousand Twenty Five [Member]
Debt Instrument [Line Items]
Debt instrument, face amount						$ 850,000,000
Debt Instrument, Interest Rate, Stated Percentage						2.375%
Senior Unsecured Notes [Member] | Two Point Eight Seven Five Due Twenty Twenty Nine [Member]
Debt Instrument [Line Items]
Debt instrument, face amount						$ 825,000,000
Debt Instrument, Interest Rate, Stated Percentage						2.875%
Senior Unsecured Notes [Member] | Three Point Seven Zero Zero Due Twenty Forty Nine [Member]
Debt Instrument [Line Items]
Debt instrument, face amount						$ 825,000,000
Debt Instrument, Interest Rate, Stated Percentage						3.70%
Commercial Paper Program
Debt Instrument [Line Items]
Commercial paper authorized		3,500,000,000		3,500,000,000			$ 2,500,000,000
Commercial paper		500,000,000		500,000,000					$ 697,000,000
364-Day Facility [Member] | Senior Revolving Credit Facility [Member]
Debt Instrument [Line Items]
Maximum borrowing capacity		1,000,000,000		1,000,000,000
5-Year Facility [Member] | Senior Revolving Credit Facility [Member]
Debt Instrument [Line Items]
Maximum borrowing capacity		$ 2,500,000,000		$ 2,500,000,000				$ 3,500,000,000

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Income Taxes (Narrative) (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Income Tax Disclosure [Abstract]
Income tax expense	$ 306	$ 282	$ 1,014	$ 1,200
Effective tax rate	20.60%	22.70%	20.70%	26.50%
Health Insurance Provider Fee, nondeductible expense		$ 76		$ 243

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Basis Of Presentation and Significant Accounting Policies

9 Months Ended

Sep. 30, 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. For additional information on prior year reclassifications, see Note 15, “Segment Information.” 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 and nine months ended September 30, 2019 and 2018 have been recorded. The results of operations for the three and nine months ended September 30, 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 $242 and $222 at September 30, 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, any amounts probable of being owed under any residual value guarantees and discount rate determined at lease commencement. As our leases do not generally 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, the 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 as of September 30, 2019. 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. Beginning in the second quarter of 2019, administrative fees and other revenues also include unaffiliated revenue from services performed by IngenioRx. 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 September 30, 2019. For the three and nine months ended September 30, 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 consolidated 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 entirety of ASU 2018-13 or only the provisions that eliminate or modify disclosure 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 allowed 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 sheets. The adoption of ASU 2018-02 did not have any impact on our consolidated 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 ASC 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 the old guidance, the premium was 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 consolidated results of operations, cash flows or 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 versus 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 represent 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, or on our consolidated results of operations, cash flows or 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 Flows, 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 consolidated results of operations or 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 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 sheets. 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 May 2019, the FASB issued Accounting Standards Update No. 2019-05, Financial Instruments - Credit Losses (Topic 326): Targeted Transition Relief, or ASU 2019-05. In April 2019, the FASB issued Accounting Standards Update No. 2019-04, Codification Improvements to Topic 326, Financial Instruments -

Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments. In November 2018, the FASB issued Accounting Standards Update No. 2018-19, Codification Improvements to Topic 326, Financial Instruments - Credit Losses. These updates provide an option to irrevocably elect to measure certain individual financial assets at fair value instead of amortized cost and 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 requires a cumulative-effect adjustment to the statement of financial position to the opening balance of retained earnings at the date of adoption and a prospective transition approach for debt securities for which an other-than-temporary impairment had been recognized before the adoption date. The effect of a prospective transition approach is to maintain the same amortized cost basis before and after the date of adoption. ASU 2016-13 is effective for us on January 1, 2020, with early adoption permitted. We are currently gathering data and evaluating the effects the adoption of ASU 2016-13 will have on our consolidated financial statements.

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. While we are continuing to evaluate the effects the adoption of ASU 2018-15 will have on our consolidated financial position, results of operations and cash flows; we intend to apply the prospective method of adoption.

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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Medical Claims Payable (Reconciliation Of Net Incurred Medical Claims To Benefit Expense) (Details) - USD ($) $ in Millions	3 Months Ended						9 Months Ended
	Sep. 30, 2019	Jun. 30, 2019	Mar. 31, 2019	Sep. 30, 2018	Jun. 30, 2018	Mar. 31, 2018	Sep. 30, 2019	Sep. 30, 2018
Reconciliation of net incurred medical claims to benefit expense [Line Items]
Total net incurred medical claims	$ 19,897	$ 19,484	$ 18,339	$ 17,411	$ 16,923	$ 16,204	$ 57,720	$ 50,538
Quality improvement and other claims expense	856	884	943	774	805	842	2,683	2,421
Benefit expense	20,753	20,368	19,282	18,185	17,728	17,046	60,403	52,959
Government Business Segment [Member]
Reconciliation of net incurred medical claims to benefit expense [Line Items]
Total net incurred medical claims	13,351	13,062	12,483	11,397	11,039	10,794	38,896	33,230
Commercial Specialty Business Segment [Member]
Reconciliation of net incurred medical claims to benefit expense [Line Items]
Total net incurred medical claims	$ 6,546	$ 6,422	$ 5,856	$ 6,014	$ 5,884	$ 5,410	$ 18,824	$ 17,308

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Leases (Lease and Other Information) (Details) $ in Millions	3 Months Ended	9 Months Ended
	Sep. 30, 2019 USD ($)	Sep. 30, 2019 USD ($)
Operating Lease, Cost	$ 48	$ 138
Short-term Lease, Cost	9	33
Sublease Income	(4)	(12)
Lease, Cost	53	159
Operating Lease, Payments	43	132
Right-of-use assets obtained in exchange for new operating lease liabilities	$ 33	$ 33
Operating Lease, Weighted Average Remaining Lease Term	6 years	6 years
Weighted Average Discount Rate, Percent	3.96%	3.96%
Other Noncurrent Assets [Member]
Operating Lease, Right-of-Use Asset	$ 577	$ 577
Other Current Liabilities [Member]
Operating Lease, Liability, Current	167	167
Other Noncurrent Liabilities [Member]
Operating Lease, Liability, Noncurrent	$ 473	$ 473

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Segment Information Segment Information (Major Product Revenues for Each Reportable Segment) (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Major Product Revenue By Segment [Line Items]
Insurance Services Revenue	$ 26,444	$ 22,980	$ 76,009	$ 68,037
Commercial Specialty Business Segment [Member]
Major Product Revenue By Segment [Line Items]
Insurance Services Revenue	9,284	8,933	28,093	26,939
Government Business Segment [Member]
Major Product Revenue By Segment [Line Items]
Insurance Services Revenue	15,955	13,979	46,419	40,951
Other Segment [Member]
Major Product Revenue By Segment [Line Items]
Insurance Services Revenue	2,508	398	3,850	1,108
Segment Eliminations [Member]
Major Product Revenue By Segment [Line Items]
Insurance Services Revenue	(1,303)	(330)	(2,353)	(961)
Managed Care Products [Member] | Commercial Specialty Business Segment [Member]
Major Product Revenue By Segment [Line Items]
Insurance Services Revenue	7,542	7,211	22,806	21,852
Managed Care Products [Member] | Government Business Segment [Member]
Major Product Revenue By Segment [Line Items]
Insurance Services Revenue	15,847	13,860	46,111	40,610
Managed Care Services [Member] | Commercial Specialty Business Segment [Member]
Major Product Revenue By Segment [Line Items]
Insurance Services Revenue	1,330	1,332	4,049	3,913
Managed Care Services [Member] | Government Business Segment [Member]
Major Product Revenue By Segment [Line Items]
Insurance Services Revenue	108	119	308	341
Dental Vision Products And Services [Member] | Commercial Specialty Business Segment [Member]
Major Product Revenue By Segment [Line Items]
Insurance Services Revenue	325	306	975	914
Other Products [Member] | Commercial Specialty Business Segment [Member]
Major Product Revenue By Segment [Line Items]
Insurance Services Revenue	$ 87	$ 84	$ 263	$ 260

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Derivative Financial Instruments Derivative Financial Instruments

9 Months Ended

Sep. 30, 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 Offered Rate.

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 $277 and $246 at September 30, 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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Medical Claims Payable

9 Months Ended

Sep. 30, 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 nine months ended September 30, 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	18,986			39,171			58,157
Prior periods redundancies	(162		)	(275		)	(437		)
Total net incurred medical claims	18,824			38,896			57,720
Net payments attributable to:
Current period medical claims	16,277			33,474			49,751
Prior periods medical claims	2,213			4,253			6,466
Total net payments	18,490			37,727			56,217
Net medical claims payable, end of period	2,910			5,825			8,735
Ceded medical claims payable, end of period	8			27			35
Gross medical claims payable, end of period	$	2,918		$	5,852		$	8,770

At September 30, 2019, the total of net incurred but not reported liabilities plus expected development on reported claims for the Commercial & Specialty Business was $30, $171 and $2,709 for the claim years 2017 and prior, 2018 and 2019, respectively.

At September 30, 2019, the total of net incurred but not reported liabilities plus expected development on reported claims for the Government Business was $23, $105 and $5,697 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 nine months ended September 30, 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	17,732			33,664			51,396
Prior periods redundancies	(424		)	(434		)	(858		)
Total net incurred medical claims	17,308			33,230			50,538
Net payments attributable to:
Current period medical claims	15,275			29,236			44,511
Prior periods medical claims	2,671			3,833			6,504
Total net payments	17,946			33,069			51,015
Net medical claims payable, end of period	2,667			4,764			7,431
Ceded medical claims payable, end of period	10			27			37
Gross medical claims payable, end of period	$	2,677		$	4,791		$	7,468

The reconciliation of net incurred medical claims to benefit expense included in our consolidated statements of income for periods in 2019 are as follows:

	Three Months Ended						Nine Months Ended   September 30, 2019
	March 31, 2019		June 30, 2019		September 30, 2019
Net incurred medical claims:
Commercial & Specialty Business	$	5,856	$	6,422	$	6,546	$	18,824
Government Business	12,483		13,062		13,351		38,896
Total net incurred medical claims	18,339		19,484		19,897		57,720
Quality improvement and other claims expense	943		884		856		2,683
Benefit expense	$	19,282	$	20,368	$	20,753	$	60,403

Net incurred medical claims for the three months ended March 31, 2019 and June 30, 2019 in the table above include a reclassification between the Commercial and Specialty Business and Government Business segments to adjust certain intercompany eliminations. This reclassification did not impact any other amounts presented in the consolidated financial statements.

The reconciliation of net incurred medical claims to benefit expense included in our consolidated statements of income for periods in 2018 are as follows:

	Three Months Ended						Nine Months Ended   September 30, 2018
	March 31, 2018		June 30, 2018		September 30, 2018
Net incurred medical claims:
Commercial & Specialty Business	$	5,410	$	5,884	$	6,014	$	17,308
Government Business	10,794		11,039		11,397		33,230
Total net incurred medical claims	16,204		16,923		17,411		50,538
Quality improvement and other claims expense	842		805		774		2,421
Benefit expense	$	17,046	$	17,728	$	18,185	$	52,959

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 September 30, 2019, is as follows:

	Commercial & Specialty Business		Government Business		Total
Net medical claims payable, end of period	$	2,910	$	5,825	$	8,735
Ceded medical claims payable, end of period	8		27		35
Insurance lines other than short duration	—		207		207
Gross medical claims payable, end of period	$	2,918	$	6,059	$	8,977

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Organization (Details) medical_member in Millions	Sep. 30, 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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Accumulated Other Comprehensive Income (Tables)

9 Months Ended

Sep. 30, 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 September 30, 2019 and 2018 is as follows:

	September 30
	2019			2018
Investments, excluding non-credit component of other-than-temporary impairments:
Gross unrealized gains	$	770		$	170
Gross unrealized losses	(54		)	(289		)
Net pre-tax unrealized gains (losses)	716			(119		)
Deferred tax (liability) asset	(164		)	24
Net unrealized gains (losses) on investments	552			(95		)
Non-credit components of other-than-temporary impairments on investments:
Unrealized losses	(5		)	(2		)
Deferred tax asset	1			—
Net unrealized non-credit component of other-than-temporary impairments on investments	(4		)	(2		)
Cash flow hedges:
Gross unrealized losses	(340		)	(315		)
Deferred tax asset	63			66
Net unrealized losses on cash flow hedges	(277		)	(249		)
Defined benefit pension plans:
Deferred net actuarial loss	(730		)	(587		)
Deferred prior service credits	(1		)	(1		)
Deferred tax asset	188			153
Net unrecognized periodic benefit costs for defined benefit pension plans	(543		)	(435		)
Postretirement benefit plans:
Deferred net actuarial loss	(57		)	(75		)
Deferred prior service costs	25			37
Deferred tax asset	8			10
Net unrecognized periodic benefit costs for postretirement benefit plans	(24		)	(28		)
Foreign currency translation adjustments:
Gross unrealized losses	(4		)	(2		)
Deferred tax asset	1			—
Net unrealized losses on foreign currency translation adjustments	(3		)	(2		)
Accumulated other comprehensive loss	$	(299	)	$	(811	)

Other Comprehensive Income (Loss) Reclassification Adjustments

Other comprehensive income (loss) reclassification adjustments for the three months ended September 30, 2019 and 2018 are as follows:

	Three Months Ended September 30
	2019			2018
Investments:
Net holding gain (loss) on investment securities arising during the period, net of tax (expense) benefit of ($35) and $12, respectively	$	119		$	(45	)
Reclassification adjustment for net realized (gain) loss on investment securities, net of tax expense (benefit) of $1 and ($3), respectively	(3		)	9
Total reclassification adjustment on investments	116			(36		)
Non-credit component of other-than-temporary impairments on investments:
Non-credit component of other-than-temporary impairments on investments, net of tax expense of ($0) and ($2), respectively	(1		)	(2		)
Cash flow hedges:
Holding (loss) gain, net of tax expense of ($2) and ($1), respectively	(34		)	2
Other:
Net change in unrecognized periodic benefit costs for defined benefit pension and postretirement benefit plans, net of tax expense of ($1) and ($2), respectively	4			7
Foreign currency translation adjustment, net of tax expense of ($0) and ($0), respectively	(1		)	—
Net gain (loss) recognized in other comprehensive income, net of tax (expense) benefit of ($37) and $4, respectively	$	84		$	(29	)

Other comprehensive income (loss) reclassification adjustments for the nine months ended September 30, 2019 and 2018 are as follows:

	Nine Months Ended September 30
	2019			2018
Investments:
Net holding gain (loss) on investment securities arising during the period, net of tax (expense) benefit of ($205) and $109, respectively	$	705		$	(378	)
Reclassification adjustment for net realized (gain) loss on investment securities, net of tax benefit of $(1) and $(7), respectively	6			25
Total reclassification adjustment on investments	711			(353		)
Non-credit component of other-than-temporary impairments on investments:
Non-credit component of other-than-temporary impairments on investments, net of tax expense of ($0) and ($2), respectively	(2		)	(2		)
Cash flow hedges:
Holding (loss) gain, net of tax expense of ($2) and ($9), respectively	(31		)	34
Other:
Net change in unrecognized periodic benefit costs for defined benefit pension and postretirement benefit plans, net of tax expense of ($3) and ($7), respectively	10			22
Foreign currency translation adjustment, net of tax expense of ($0) and ($1), respectively	(1		)	—
Net gain (loss) recognized in other comprehensive income, net of tax (expense) benefit of ($211) and $83, respectively	$	687		$	(299	)

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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	Sep. 30, 2019 USD ($) securities	Dec. 31, 2018 USD ($) securities
Schedule of Investments [Line Items]
Number of securities, less than 12 months | securities	954	2,833
Estimated fair value, less than 12 months	$ 1,781	$ 5,849
Gross unrealized loss, less than 12 months	$ (24)	$ (184)
Number of securities, 12 months or greater | securities	688	2,801
Estimated fair value, 12 months or greater	$ 1,200	$ 4,946
Gross unrealized loss, 12 months or greater	$ (35)	$ (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	$ 49	$ 47
Gross unrealized loss, less than 12 months	$ 0	$ 0
Number of securities, 12 months or greater | securities	5	25
Estimated fair value, 12 months or greater	$ 14	$ 79
Gross unrealized loss, 12 months or greater	$ 0	$ (1)
Government Sponsored Securities [Member]
Schedule of Investments [Line Items]
Number of securities, less than 12 months | securities	6	8
Estimated fair value, less than 12 months	$ 5	$ 11
Gross unrealized loss, less than 12 months	$ 0	$ 0
Number of securities, 12 months or greater | securities	3	24
Estimated fair value, 12 months or greater	$ 1	$ 31
Gross unrealized loss, 12 months or greater	$ 0	$ (1)
States, Municipalities And Political Subdivisions, Tax-Exempt [Member]
Schedule of Investments [Line Items]
Number of securities, less than 12 months | securities	66	177
Estimated fair value, less than 12 months	$ 108	$ 295
Gross unrealized loss, less than 12 months	$ (1)	$ (3)
Number of securities, 12 months or greater | securities	16	604
Estimated fair value, 12 months or greater	$ 13	$ 1,032
Gross unrealized loss, 12 months or greater	$ (1)	$ (19)
Corporate Securities [Member]
Schedule of Investments [Line Items]
Number of securities, less than 12 months | securities	455	2,185
Estimated fair value, less than 12 months	$ 711	$ 4,503
Gross unrealized loss, less than 12 months	$ (17)	$ (170)
Number of securities, 12 months or greater | securities	338	1,220
Estimated fair value, 12 months or greater	$ 509	$ 2,072
Gross unrealized loss, 12 months or greater	$ (25)	$ (115)
Residential Mortgage-Backed Securities [Member]
Schedule of Investments [Line Items]
Number of securities, less than 12 months | securities	228	259
Estimated fair value, less than 12 months	$ 422	$ 383
Gross unrealized loss, less than 12 months	$ (4)	$ (3)
Number of securities, 12 months or greater | securities	215	816
Estimated fair value, 12 months or greater	$ 323	$ 1,458
Gross unrealized loss, 12 months or greater	$ (4)	$ (47)
Commercial Mortgage-Backed Securities [Member]
Schedule of Investments [Line Items]
Number of securities, less than 12 months | securities	1	6
Estimated fair value, less than 12 months	$ 3	$ 11
Gross unrealized loss, less than 12 months	$ 0	$ 0
Number of securities, 12 months or greater | securities	4	19
Estimated fair value, 12 months or greater	$ 8	$ 37
Gross unrealized loss, 12 months or greater	$ 0	$ (2)
Other Securities [Member]
Schedule of Investments [Line Items]
Number of securities, less than 12 months | securities	190	193
Estimated fair value, less than 12 months	$ 483	$ 599
Gross unrealized loss, less than 12 months	$ (2)	$ (8)
Number of securities, 12 months or greater | securities	107	93
Estimated fair value, 12 months or greater	$ 332	$ 237
Gross unrealized loss, 12 months or greater	$ (5)	$ (5)