Summary of Significant Accounting Policies (Tables)

12 Months Ended

Dec. 31, 2018

Accounting Policies [Abstract]

Requirements and Effects of New Accounting Guidance

Accounting Standard and Adoption Date	Requirements and Effects of Adopting New Guidance
GUIDANCE ADOPTED JANUARY 1, 2018
Revenue from Contracts with Customers (Accounting Standards Update (“ASU”) 2014-09 and related amendments)	Requires:
	•	Revenue to depict the transfer of 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
	•	Additional revenue-related disclosures
	Effects of adoption:
	•	Applies to the Company’s service and pharmacy contracts with customers
	•	Adopted through full retrospective restatement
	•	Cumulative-effect adjustment of $24 million after-tax was recorded, reducing the December 31, 2015 balance of retained earnings. This adjustment established a contract liability for service fee revenue billed that must be deferred and allocated to services performed after a customer contract terminates. Subsequent changes in the contract liability and the related impact to net income and per share amounts since adoption were immaterial.
	•	Immaterial reclassifications were made to prior periods in the Consolidated Statements of Income to conform to the current presentation. The ASU and related interpretive guidance provide clarification on topics including whether all or a part of a contract is within its scope, and the definition of a customer. Companies are required to identify and evaluate distinct performance obligations within their contracts. These clarifications resulted in reclassifications within the Integrated Medical segment affecting premiums, fees and other revenues, benefit expenses, and selling, general and administrative expenses and had no impact on revenue recognition patterns or net income.
	Expedients and exemptions elected:
	•	Incremental costs of obtaining service and pharmacy contracts for short-term arrangements are expensed as incurred.
	•	The Company does not disclose information about the aggregate amount of transaction price allocated to remaining performance obligations as its contracts are either short-term, or the remaining transaction price consists of variable consideration that relates specifically to wholly unsatisfied future periods of service. See the discussion of the Company’s accounting policies for fees and pharmacy revenues beginning on page 91.

Accounting Standard and Adoption date	Requirements and Effects of Adopting New Guidance
GUIDANCE ADOPTED JANUARY 1, 2018
Recognition and Measurement of Financial Assets and Financial Liabilities (ASU 2016-01)	Requires:
	•	Entities to measure equity investments at fair value in net income if they are neither consolidated nor accounted for under the equity method
	Effects of adoption:
	•	Certain limited partnership interests previously carried at cost of approximately $200 million were increased to fair value of approximately $275 million on January 1, 2018. Subsequent changes in fair value are reported in net investment income.
	•	Changes in fair value for equity securities having a readily determinable fair value that were previously reported in accumulated other comprehensive income (“AOCI”) are now reported in net realized investment gains (losses).
	•	Cumulative-effect adjustment of $62 million after-tax was recorded, increasing the opening balance of retained earnings in 2018.
	•	See Notes 9 and 10 for updated disclosures about equity securities.
Targeted Improvements to Accounting for Hedging Activities (ASU 2017-12) Early adopted as of January 1, 2018	Guidance:
	•	Relaxes eligibility requirements for financial and nonfinancial hedging strategies for hedge accounting and changes how companies assess effectiveness
	•	Amends presentation and disclosure requirements to improve transparency about the uses and results of hedging programs
	Effects of adoption:
	•	An immaterial amount of retained earnings was reclassified to AOCI, decreasing the opening balance in 2018, for a portion of the hedging instruments that was previously excluded from the assessment of hedge effectiveness for fair value hedges.
	•	See Note 9 for the Company’s disclosures about derivatives.
Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income (ASU 2018-02)Early adopted as of January 1, 2018	Guidance:
	•	Allows companies to reclassify the tax effects stranded in AOCI to retained earnings as a result of 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 (referred to throughout this Form 10-K as “U.S. tax reform” or “U.S. tax reform legislation”)
	•	Requires additional disclosures of the Company’s accounting policy for releasing income tax effects from AOCI
	•	Allows companies to apply the guidance retrospectively or in the period of adoption
	Effects of adoption: AOCI of $229 million was reclassified to retained earnings, increasing the opening balance in 2018. See Note 12 for additional information including accounting policy disclosures.

Accounting Standard and Effective Date		Requirements and Expected Effects of New Guidance Not Yet Adopted
Leases (ASU 2016-02 and related amendments) Required as of January 1, 2019	Requires:
	•	Balance sheet recognition of assets and liabilities arising from leases, including leases embedded in other contracts
	•	Additional disclosures of the amount, timing and uncertainty of cash flows from leases
	•	Modified retrospective approach for leases in effect as of and after the date of adoption with a cumulative-effect adjustment recorded in retained earnings
	Expected effects:
	•	The Company will adopt this ASU in the first quarter of 2019 on a modified retrospective basis and will not restate comparative periods. While we are still finalizing our adoption procedures, we estimate the primary impact to our Consolidated Balance Sheet will be an increase to assets and liabilities of approximately $700 million for the right-of-use asset and corresponding lease liability related to existing operating leases. We do not expect the impact to retained earnings to be material.
	•	The Company elected the optional practical expedient to retain the current classification of leases, and therefore, we do not expect a material impact to the Consolidated Statements of Income or Cash Flows.
	•	The Company has implemented a new lease system and developed requisite changes to internal controls over financial reporting.
	•	The Company is continuing to work to develop required disclosures.
	•	The Company adopted this new guidance as of the effective date and will not present comparative periods in the financial statements, as recently allowed.
Measurement of Credit Losses on Financial Instruments (ASU 2016-13)Required as of January 1, 2020, with early adoption permitted as of January 1, 2019	Requires:
	•	A new approach using expected credit losses to estimate and recognize credit losses for certain financial instruments such as mortgage loans, reinsurance recoverables and other receivables when such instruments are first originated or acquired.
	•	Changes in the criteria for impairment of available-for-sale debt securities
	•	Adoption using a modified retrospective approach with a cumulative-effect adjustment recorded in retained earnings
	Expected effects:
	•	The Company is continuing to evaluate this new standard and its effects on our financial statements and disclosures. We expect to adopt the standard as of January 1, 2020.
	•	An additional allowance for future expected credit losses for certain financial instruments may be required at adoption.
Simplifying the Test for Goodwill Impairment (ASU 2017-04)Required as of January 1, 2020, with early adoption permitted as of January 1, 2017	Guidance:
	•	Simplifies the accounting for goodwill impairment by eliminating the need to determine the fair value of individual assets and liabilities of a reporting unit to measure a goodwill impairment
	•	Redefines the amount of goodwill impairment to equal the amount by which a reporting unit’s carrying value exceeds its fair value, limited to the total amount of goodwill of the reporting unit
	•	Requires prospective adoption
	Expected effects:
	•	The Company is evaluating this new standard and its expected timing of adoption.

Accounting Standard and Effective Date		Requirements and Expected Effects of New Guidance Not Yet Adopted
Targeted Improvements to the Accounting for Long-Duration Contracts (ASU 2018-12)Required as of January 1, 2021	Requires (for insurance entities that issue long-duration contracts):
	•	Cash flow assumptions used to measure the liability for future policy benefits for traditional and limited-pay contract to be reconsidered at least annually with any changes reflected in net income.
	•	Discount rate assumptions to be reviewed quarterly (based on an upper-medium grade (low credit risk) fixed-income instrument yield that maximizes the use of observable market inputs) with any changes reflected in other comprehensive income.
	•	Deferred policy acquisition costs to be amortized on a constant-level basis over the expected term of the related contract.
	•	Fair value measurement of all market risk benefits.
	•	Additional disclosures, including liability rollforwards and information about significant inputs, judgments, assumptions and methods used in measurement.
	•	Transition methods at adoption vary:
		-	Changes to the liability for future policy benefits will use a modified retrospective approach (applied to all contracts on the basis of their carrying amounts as of the beginning of the earliest period presented), with an option to elect a full retrospective transition under certain criteria.
		-	Deferred policy acquisition costs are to be transitioned consistent with the method applied to the liability for future policyholder benefits.
		-	Market risk benefits are required to transition using retrospective application.
	Expected effects:
	•	The Company is evaluating the impact of this newly-issued guidance, but it is expected to have a significant impact on our processes, controls, systems and financial results. The new guidance will apply to insurance products predominantly sold in the International Markets segment and Group Disability and Other.

Accounts Receivable, Net

(In millions)	2018		2017
Insurance customer receivables	$	1,888	$	1,818
Noninsurance customer receivables		4,988		441
Pharmaceutical manufacturers receivable(1)		3,321		645
Other receivables		276		251
Total accounts receivable, net	$	10,473	$	3,155
(1) Includes $406 million at December 31, 2018 and $336 million at December 31, 2017 of receivables under noninsurance customer contracts.