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Income Taxes
6 Months Ended
Jun. 30, 2014
Income Tax Disclosure [Abstract]  
Income Taxes
INCOME TAXES
The effective income tax rate from operations was (22.3)% and 35.6% for the three months ended June 30, 2014 and 2013, respectively, and 6.9% and 37.3% for the six months ended June 30, 2014 and 2013, respectively. For the three and six months ended June 30, 2014, our effective tax rate was impacted by the health insurer fee which became effective under the ACA. The fee is not deductible for federal income tax purposes and in many state jurisdictions. The impacts of the non-deductibility of the health insurer fee for the three and six months ended June 30, 2014 were increases to our effective tax rate of 13.7 and 14.0 percentage points, respectively. The health insurer fee is effective for calendar years beginning after December 31, 2013 and is payable in 2014. See Note 2, under the heading "Accounting for Certain Provisions of the ACA—Premium-based Fee on Health Insurers" for additional information regarding the health insurer fee. Other items which cause our effective tax rate to differ from the statutory federal tax rate of 35% for the three and six months ended June 30, 2014 include state income taxes, tax-exempt interest and non-deductible compensation.
During the three months ended June 30, 2014, we recorded a $72.6 million tax benefit, net of adjustments to our reserve for uncertain tax benefits, as a result of a worthless stock loss. The loss was incurred with respect to the stock of Health Net of the Northeast, Inc., the former parent company of subsidiaries sold to United Health Group in 2009. The amount and character of the loss could be challenged by the taxing authorities, and as such, we increased our reserve for uncertain tax positions by $11.0 million as of June 30, 2014.