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Item 1. Business

2023-02-23 compared with 2022-02-24 · 500 added, 484 removed, 644 unchanged (60% of the section changed)

Cigna Corporation, together with its subsidiaries (either individually or collectively referred to as "Cigna," the "Company," "we," "our" or "us") is a global health services organization.

The Cigna Group, together with its subsidiaries, is a global health company.

On February 13, 2023, we changed our corporate name from Cigna Corporation to The Cigna Group.

We will not distinguish between our prior and current corporate name and will refer to our current corporate name throughout this Annual Report on Form 10-K.

As such, unless expressly indicated or the context requires otherwise, the terms "Company," "we," "us," and "our" in this document refer to The Cigna Group, a Delaware corporation, and, where appropriate, its subsidiaries.

On February 13, 2023, we also changed the name of our Evernorth segment to Evernorth Health Services.

We will not distinguish between our prior and current segment name and will refer to our current segment name throughout this Annual Report on Form 10-K.

Our common stock continues to be listed with, and trades on, the New York Stock Exchange under the ticker symbol "CI".

Our Purpose and Mission

To improve the health, well-being and peace of mind of those we serve

To make health care affordable, predictable and simple for those who count on us

Making it affordable:

We build on our leading, differentiated position to lower the total cost of care.

Making it predictable:

We take the surprise out of the system and help people make informed health care choices.

Making it simple:

We make it easier for the people we serve to get the care they need.

Cigna is a global health services company uniquely capable of driving affordable, predictable and simple health care, with expansive and deep capabilities that accelerate our strategy to achieve our mission of improving health, well-being and peace of mind.

It starts with the strength of our Evernorth and Cigna Healthcare platforms.

Evernorth is our services portfolio that is highly attractive to our clients and partners because of the depth of its capabilities and expertise and enables us to deepen existing relationships across our entire book of business.

Our Cigna Healthcare platform, consisting of our U.S.

The Cigna Group is a global health company committed to a better future built on the vitality of every individual and every community.

Our employees are trailblazers, relentlessly partnering and innovating solutions for better health.

This captures who we are today – and who we aspire to be in the future.

We are undergoing a revolution in health.

Our Pathways to Growth

In order to turn the differentiated value we deliver to our customers, patients, clients, communities and investors into attractive, sustained growth, we will continue to cultivate our portfolio of businesses so that it can continue to deliver the foundational and accelerated growth and cross-enterprise leverage we expect today and in the future.

• Foundational:

Mature, scaled businesses contributing steady, predictable growth.

• Accelerated:

High-growth businesses in very attractive markets.

• Cross-Enterprise Leverage:

Working together to create even greater value.

• Deep clinical expertise across pharmacy, medical and behavioral.

• Robust data and insights supporting care with greater precision and personalization.

• Focus on developing innovative solutions addressing needs of customers, patients and clients.

• Partnering with others to accelerate innovation and achieve greater impact.

• Consultative approach driven by an experienced and talented team.

The last couple of years have reoriented every person, every organization and every community toward a deeper relationship with health.

We believe that achieving both health and vitality for those we serve must fuel the actions of our over 70,000 colleagues around the world, each and every day.

We have two growth platforms:

Evernorth Health Services and Cigna Healthcare.

Evernorth Health Services is our pharmacy, care and benefits solution that is highly attractive to our clients and partners because of the depth of its capabilities and expertise.

Evernorth Health Services also enables us to deepen existing relationships across our entire book of business.

Cigna Healthcare is the health benefits provider of The Cigna Group, serving customers and clients for our U.S.

Commercial, U.S.

Government and International Health operating segments, allows us to harness our partnership relationship with physicians to deliver affordable and coordinated health care to employers and individuals.

Together, our Evernorth and Cigna Healthcare platforms provide a strong and diverse foundation that allows us to capitalize on growth opportunities by leading with our strengths – medical and pharmacy solutions – and then expanding those relationships by addressing additional client needs and innovating and delivering new services and solutions.

Cigna's employees are champions for the people we serve and over the past decade, our focus has shifted to helping individuals and families thrive by offering solutions to prevent and better manage health challenges.

Government and International Health operating segments, and it allows us to harness our partnership relationship with physicians to deliver affordable and coordinated health care to employers and individuals.

Together, Evernorth Health Services and Cigna Healthcare provide a strong and diverse foundation that allows us to capitalize on growth opportunities by leading with our strengths – medical and pharmacy solutions – and then expanding those relationships by addressing additional client needs and innovating and delivering new services and solutions.

To transform the differentiated value we deliver to our customers, patients, clients, communities and investors into attractive, sustained growth, we continue to cultivate our portfolio of businesses with the goal of consistently delivering the foundational growth , accelerated growth and opportunity for cross-enterprise leverage we expect today and in the future.

When considering our broad portfolio of businesses, we have strong foundational businesses that will continue to grow.

These businesses often serve as the key entry point for clients with either a

pharmacy relationship, a medical relationship or both.

We also have a variety of accelerated growth businesses, both scaled and emerging, which build upon our foundational relationships or provide exposure to adjacent high-growth areas.

Our cross-enterprise leverage provides us with an opportunity to unlock even more value as the combined power of the franchise is unleashed.

The Cigna Group's employees are champions for the people we serve and over the past decade, our focus has shifted to helping individuals and families thrive by offering solutions to prevent and better manage health challenges.

When sickness or disability do occur, we support our customers by offering broad choices to help them best access high quality, affordable, whole person care.

We see three primary ways to help individuals maintain, improve or recover their physical or mental health:

1) behavioral and lifestyle changes – with more than 1,000 health coaches helping individuals set and meet health goals;

1) behavioral and lifestyle changes – with health coaches helping individuals set and meet health goals;

2) affordable, effective medication options – with access to our leading pharmacy services improving health and driving affordability;

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Our portfolio of offerings solves diverse challenges across the health care system.

We offer a differentiated set of pharmacy, medical, behavioral, dental and supplemental products and services, primarily through two brands:

Cigna and Evernorth.

We offer a differentiated set of pharmacy, medical, behavioral, dental and supplemental products and services, primarily through two growth platforms:

Evernorth Health Services and Cigna Healthcare.

Our capabilities include:

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We also develop personalized treatment paths across every dimension of care.

We continue to build upon our network of value-based provider arrangements for better customer experiences, better overall health outcomes and greater affordability.

We have a significant number of our eligible customers aligned to hundreds of our Accountable Care programs nationally.

We continue to build upon our network of value-based provider arrangements for better customer experiences, better overall health outcomes and greater affordability, with a significant number of our eligible customers aligned to our Accountable Care programs nationally.

We make medicine more affordable by reducing costs from start to finish, including those related to drug access, delivery and treatment and by identifying appropriate medication alternatives.

We partner and

innovate to enable us to deliver differentiated value and broaden our reach in new geographies or through the introduction of new solutions and offerings.

We partner and innovate to enable us to deliver differentiated value and broaden our reach in new geographies or through the introduction of new solutions and offerings.

Our key to success revolves around how deeply we care about our customers, patients and co-workers.

We intend to create a better future together by innovating and adapting, acting with speed and purpose, partnering, collaborating and keeping our promises.

During the fourth quarter of 2021, we approved a strategic plan to drive operational efficiencies.

We believe this plan, coupled with the previously announced divestiture of the international life, accident and supplemental health benefits businesses (described below), will further leverage the Company's ongoing growth to drive operational efficiency through enhancements to organization structure and increased use of automation and shared services.

In connection with these plans, we have updated our reporting segments to align with the new business reporting structure and recognized a charge in the fourth quarter of 2021 in the amount of $168 million, pre-tax ($119 million, after-tax).

Although a substantial portion of the actions associated with these strategic steps have been reflected in the current charge recognized in the fourth quarter of 2021, additional amounts are expected to be recorded in the second quarter of 2022 as we finalize our plans following the completion of the divestiture.

See Note 15 for further information regarding our organizational efficiency charge.

Information about Segments

As previously disclosed, we entered into a definitive agreement in October 2021 to sell our life, accident and supplemental benefits businesses in seven countries to Chubb INA Holdings, Inc.

("Chubb") for $5.75 billion cash (the "Chubb Transaction").

Subject to applicable regulatory approvals and customary closing conditions, we expect to complete the sale of our life, accident and supplemental benefits businesses in Hong Kong, Indonesia, New Zealand, South Korea, Taiwan, Thailand and our interest in a joint venture in Turkey in the second quarter of 2022.

In connection with the pending Chubb Transaction, we revised our business reporting structure.

As such, we adjusted our segment reporting effective in the fourth quarter of 2021 so that the results previously reported in the International Markets segment are now reported as follows:

• The businesses to be retained by Cigna are now reported in the newly created International Health operating segment that will be aggregated with our existing U.S.

Commercial and U.S.

Government operating segments in the renamed Cigna Healthcare reporting segment (previously named U.S.

• The businesses to be sold pursuant to the Chubb Transaction are now reported in Other Operations.

Throughout this Form 10-K, segment results for the years ended December 31, 2020 and 2019 have been restated to conform to the new segment presentation (see "Executive Overview" section of the Management Discussion and Analysis of Financial Condition and Results of Operations ("MD&A") located in Part II, Item 7 of this Form 10-K for a Financial Summary).

A full description of our segments follows:

Evernorth includes a broad range of coordinated and point solution health services and capabilities, as well as those from partners across the health care system, in pharmacy solutions, benefits management solutions, care delivery and care management solutions and intelligence solutions, which are provided to health plans, employers, government organizations and health care providers.

Cigna Healthcare includes Cigna's U.S.

We present the financial results of our businesses in the following segments (see "Executive Overview" section of the Management Discussion and Analysis of Financial Condition and Results of Operations ("MD&A") located in Part II, Item 7 of this Form 10-K for a Financial Summary):

Evernorth Health Services includes a broad range of coordinated and point solution health services and capabilities, as well as those from partners across the health care system, in Pharmacy Benefits, Home Delivery Pharmacy, Specialty Pharmacy, Distribution and Care Delivery and Management Solutions, which are provided to health plans, employers, government organizations and health care providers.

Within Evernorth Health Services, Pharmacy Benefits and Home Delivery Pharmacy are foundational growth businesses and Specialty Pharmacy, Distribution, and Care Delivery and Management Solutions are accelerated growth businesses.

Cigna Healthcare includes the U.S.

Commercial, U.S.

Government and International Health operating segments that provide comprehensive medical and coordinated solutions to clients and customers.

Commercial products and services include medical, pharmacy, behavioral health, dental, vision, health advocacy programs and other products and services for insured and self-insured customers.

Government solutions include Medicare Advantage, Medicare Supplement and Medicare Part D plans for seniors, and individual health insurance plans both on and off the public exchanges.

International Health solutions include health care coverage in our international markets, as well as health care benefits for globally mobile individuals and employees of multinational organizations.

The Cigna Healthcare segment is comprised of the previously named U.S.

Medical segment and the businesses to be retained from the previous International Markets segment.

Other Operations contains the remainder of our business operations, consisting of the following:

• Ongoing business:

• Corporate-Owned Life Insurance ("COLI") offers permanent insurance contracts sold to corporations to provide coverage on the lives of certain employees for the purpose of financing employer-paid future benefit obligations.

• Exiting businesses:

• International Life, Accident and Supplemental Benefits Businesses in seven countries to be sold pursuant to the Chubb Transaction.

• Group Disability and Life.

Prior to the sale of the U.S.

Group Disability and Life business on December 31, 2020, this operating segment provided group long-term and short-term disability, group life, accident, voluntary and specialty insurance products and related services.

• Run-off businesses:

• Reinsurance:

predominantly comprised of guaranteed minimum death benefit ("GMDB") and guaranteed minimum income benefit ("GMIB") business effectively exited through reinsurance with Berkshire Hathaway Life Insurance Company of Nebraska ("Berkshire") in 2013.

• Settlement Annuity business in run-off.

• Individual Life Insurance and Annuity and Retirement Benefits Businesses:

comprised of deferred gains from the sales of these businesses.

Other Operations was previously named Group Disability and Other.

Corporate reflects amounts not allocated to operating segments, including net interest expense (defined as interest on corporate debt less net investment income on investments not supporting segment and other operations), certain litigation matters, expense associated with our frozen pension plans, charitable contributions, severance, certain overhead and enterprise-wide project costs and intersegment eliminations for products and services sold between segments.

Cigna's commitment to the health, well-being and peace of mind of our employees and the people we serve remains the primary focus as the pandemic continues to impact all aspects of daily life.

Cigna is leveraging its resources, expertise, data and actionable intelligence to assist customers, clients and care providers navigate the evolving dynamics of the pandemic.

The Company continues to encourage COVID-19 vaccinations across all eligible populations to help control the spread of the virus, limit the severity of the disease and save lives.

Cigna has also expanded access to testing, care and supportive resources to help everyone it serves take care of their physical and mental health during this time and will continue to do so.

We continue to actively manage our response and assess impacts to our financial position and operating results, as well as mitigate adverse developments in our business.

In response to the pandemic, U.S.

federal and state governments have enacted new regulatory requirements as discussed in the "Business - Regulation" section of this Form 10-K.

Additionally, see "Item 1A.

Risk Factors" section of this Form 10-K for further discussion of COVID-19.

Government and International Health operating segments, which provide comprehensive medical and coordinated solutions to clients and customers.

Within Cigna Healthcare, U.S.

Commercial and International Health are our foundational growth businesses and U.S.

Government is our accelerated growth business.

Other Operations comprises the remainder of our business operations, which includes certain ongoing businesses and exiting businesses.

Our ongoing businesses include our continuing business, corporate-owned life insurance ("COLI"), and our run-off businesses.

Our run-off businesses include (i) guaranteed minimum death benefit ("GMDB") and guaranteed minimum income benefit ("GMIB") business, (ii) settlement annuity business and (iii) individual life insurance and annuity and retirement benefits businesses.

Our exiting businesses include our interest in a joint venture in Türkiye, which was sold to our partner in December 2022, the international life, accident and supplemental benefits businesses sold on July 1, 2022 and the Group Disability and Life business sold on December 31, 2020.

On July 1, 2022, the Company completed the sale of its life, accident and supplemental benefits businesses in six countries (Hong Kong, Indonesia, New Zealand, South Korea, Taiwan and Thailand) to Chubb INA Holdings, Inc.

("Chubb") for approximately $5.4 billion in cash (the "Chubb transaction") (see Note 4 to the Consolidated Financial Statements included in Part II, Item 8 of this Form 10-K).

Corporate reflects amounts not allocated to operating segments, including net interest expense (defined as interest on corporate debt less net investment income on investments not supporting segment and other operations), certain litigation matters, expense associated with our frozen pension plans, charitable contributions, operating severance, certain overhead and enterprise-wide project costs and intersegment eliminations for products and services sold between segments.

Other Information

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was renamed Cigna Corporation and Cigna Holding Company became its subsidiary concurrent with the consummation of the combination with Express Scripts on December 20, 2018.

You can access our website at http://www.cigna.com to learn more about our company.

Cigna Corporation was renamed The Cigna Group in February 2023.

You can access our website at http://www.thecignagroup.com to learn more about our company.

We make annual, quarterly and current reports and proxy statements and amendments to those reports available, free of charge through our website as soon as reasonably practicable after we electronically file these materials with, or furnish them to, the Securities and Exchange Commission ("SEC").

We also use our website as a means of disclosing material information and for complying with our disclosure obligations under the SEC's Regulation FD (Fair Disclosure).

Important information, including news releases, analyst presentations and financial information regarding Cigna is routinely posted on our website.

Important information, including news releases, analyst presentations and financial information regarding The Cigna Group is routinely posted on our website.

Accordingly, investors should monitor the Investor Relations portion of our website, in addition to following our press releases, SEC filings and public conference calls and webcasts.

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See also "Code of Ethics and Other Corporate Governance Disclosures" in Part III, Item 10 of this Form 10-K for additional information regarding the availability of our Codes of Ethics on our website.

Evernorth includes a broad range of coordinated and point solution health services and capabilities, as well as those from partners across the health care system, in pharmacy solutions, benefits management solutions, care delivery and care management solutions and intelligence solutions to deliver custom and flexible solutions that meet the needs of our clients and customers.

In 2021, Evernorth reported adjusted revenues of $131.9 billion and pre-tax adjusted income from operations of $5.8 billion.

In 2021, Evernorth continued to execute on our strategic initiatives through the acquisition of MDLIVE, Inc.

See "Care Delivery and Care Management Solutions" below for more information about MDLIVE.

Evernorth accelerates delivery of innovative and flexible solutions to create value and meet the diverse needs of health plans, employers, health care providers and government organizations by:

· Partnering in unconventional ways to solve complex problems across a fragmented health care ecosystem, fueled by connected data and expertise that drives purposeful innovation

· Creating flexible and focused solutions tailored to client needs, using Evernorth's combined strengths and capabilities, as well as strategic partnerships, to deliver:

Intellectual Property Rights

We hold a variety of trademarks and service marks used throughout our businesses.

We also use patents to protect our proprietary technological advances and to differentiate ourselves in the market.

The Cigna Group companies hold over 320 United States patents.

We are not substantially dependent on any single patent or group of related patents.

We are not aware of any facts that could materially impact the continuing use of any of our intellectual property.

EVERNORTH HEALTH SERVICES

These offerings are also integrated into our Cigna Healthcare solutions to span the total health care delivery system, further

reducing the total cost of care for our clients and customers.

In 2022, Evernorth Health Services reported adjusted revenues of $140.3 billion and pre-tax adjusted income from operations of $6.1 billion.

On February 13, 2023, we changed the name of our Evernorth segment to Evernorth Health Services.

We will not distinguish between our prior and current segment name and will refer to our current segment name throughout this Annual Report on Form 10-K.

Evernorth Health Services accelerates delivery of comprehensive, connected solutions to create value and meet the diverse needs of health plans, employers, health care providers and government organizations by:

• Partnering in unconventional ways to solve complex problems across a fragmented health care ecosystem, fueled by data and expertise that drives purposeful innovation

• Creating flexible solutions tailored to client needs, using Evernorth Health Services' combined strengths and capabilities, as well as strategic partnerships, to deliver:

better, more efficient care for patients;

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• Offering home delivery, virtual and in-person care, and specialty customer-centric solutions that meet the needs of our clients and customers in ways that unlock greater value and better health services while providing better and specialized clinical care

· Delivering more affordable solutions that provide more discounts and drive risk-sharing and value-based care across the pharmaceutical supply chain

• Delivering more affordable solutions that provide more discounts and drive risk-sharing and value-based care

• Promoting the use of generics and lowest-cost, clinically effective brands of medications

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Subsidiaries Key Relationships Primary Competitors

Pharmacy Solutions Express Scripts Pharmacy ® , Accredo ® , Freedom Fertility Pharmacy ® , Therapeutic Resource Center ®

Clients, Customers, Health Care Providers Independent Pharmacy Benefit Managers ("PBMs"), Managed Care PBMs, Retail Pharmacies, Specialty Pharmacies

Benefits Management Solutions eviCore Healthcare ® , Express Scripts PBM, myMatrixx ® , Care Continuum, Embarc Benefit Protection ® , Express Scripts MedRx Management SM , FamilyPath SM , Value Based Programs (Express Scripts SafeGuardRx ® , Express Scripts Patient Assurance ® ), National Preferred Formulary, Advanced Utilization Management, Enhanced Fraud, Waste & Abuse, Advanced Opioid Management ® , ScreenRx ® , SaveOnSP, Ascent Health Services, Econdisc, Inside Rx ® , Evernorth Wholesale Marketplace SM

Clients, Customers, Health Care Providers, Consultants, Health Plans, Commercial and Government Payors, Self-paying customers (InsideRx only), Pharmacy Providers Health Plans, Independent PBMs, Managed Care PBMs, Third Party Benefit Administrators, Group Purchasing Organizations, Clinical Solutions and Health Care Data Analytics Companies

Care Delivery and Care Management Solutions inMynd SM , Health Connect 360 ® , RationalMed ® , Evernorth Digital Health Formulary SM , Behavioral Health, Cigna Medical Group, MDLIVE ® , Evernorth Direct Health, Alegis

Clients, Customers Independent PBMs, Managed Care PBMs, Managed Care Organizations, Care Delivery and Care Management Solutions Providers, Third-Party Benefit Administrators

Evernorth Intelligence Solutions Express Scripts Lab, MediCUBE ® , HealthPredict SM , ScriptVision ®

Health Care Providers, Clients Health Care Data Analytics Companies

Provider Services CuraScript SD ®

Health Care Providers, Clinics, Hospitals Specialty Drug Distributors

Driving Foundational Growth Pharmacy Benefits Express Scripts PBM, myMatrixx ® , Care Continuum, Express Scripts MedRx Management SM , Embarc Benefit Protection ® , FamilyPath SM , Advanced Utilization Management, Enhanced Fraud, Waste & Abuse, Ascent Health Services, Econdisc, SaveOnSP, Inside Rx ® , Evernorth Wholesale Marketplace SM , Value-Based Programs (Express Scripts SafeGuardRx ® , Express Scripts Patient Assurance ® ), National Preferred Formulary, Advanced Opioid Management ® , ScreenRx ®

Clients, Customers, Health Care Providers, Consultants, Health Plans, Commercial and Government Payors, Self-paying Customers, Pharmacy Providers Health Plans, Independent Pharmacy Benefit Managers ("PBMs"), Managed Care PBMs, Third-Party Benefit Administrators, Group Purchasing Organizations, Clinical Solutions and Health Care Data Analytics Companies

Home Delivery Pharmacy Express Scripts Pharmacy ®

Clients, Customers, Health Care Providers Independent PBMs, Managed Care PBMs, Retail Pharmacies

Driving Accelerated Growth Specialty Pharmacy Accredo ® , Freedom Fertility Pharmacy ® , Therapeutic Resource Center ®

Clients, Customers, Health Care Providers, Specialty Drug Distributors Specialty Pharmacies

Distribution CuraScript SD ®

Clinics, Hospitals Specialty Drug Distributors

Care Delivery and Management Solutions Evernorth Care Group, Evernorth Care Services, Evernorth Care Solutions, Evernorth Direct Health, Evernorth Home-Based Care, eviCore Healthcare ® , MDLIVE ® , Evernorth Behavioral Health, inMynd SM , Health Connect 360 ® , RationalMed ® , Evernorth Digital Health Formulary SM , Evernorth Labs, Trend Central ® , HealthPredict SM , MediCUBE ® , ScriptVision ®

Clients, Customers, Health Care Providers Managed Care Organizations, Care Delivery and Care Management Solutions Providers, Third-Party Benefit Administrators, Health Care Data Analytics Companies

Principal Products & Services

• Pharmacy Solutions.

The pharmacy operations consist of 13 order processing home delivery and specialty pharmacies, six patient contact centers, 30 specialty dispensing pharmacies and four high-volume automated dispensing pharmacies located throughout the United States.

Our high-volume automated dispensing pharmacies are located in Arizona, Indiana, Missouri and New Jersey.

◦ Express Scripts Pharmacy.

• Pharmacy Benefits.

Express Scripts Pharmacy dispenses approximately 1.6 billion adjusted prescriptions (1) annually to members of pharmacy plans managed by our Express Scripts PBM.

The service offers free standard shipping of medications nationwide, usually in a 90-day supply, directly to the customer's home.

The service allows for automatic refills on eligible medications and unrestricted telephone access to specially trained pharmacists to answer customer questions.

The front-end of our pharmacy is organized into Therapeutic Resource Centers, where pharmacists focus their practice of pharmacy by condition, which offers customers a more personalized experience while providing enhanced clinical care.

Our differentiated practice of pharmacy, coupled with our advanced automated dispensing technology, results in safer and more accurate pharmacy operations when compared to retail pharmacies, convenient access to maintenance medications and better management of our clients' drug costs through operating efficiencies and generic substitutions.

Our research shows that Express Scripts Pharmacy achieves a higher level of therapeutic interventions, better adherence, more cost savings and a consistently higher Net Promoter Score ("NPS") compared to retail pharmacies.

◦ Specialty Pharmacy Services.

Specialty medications are primarily characterized as high-cost medications for the treatment of complex and rare diseases.

These medications broadly include those with frequent dosing adjustments, intensive clinical monitoring, the need for customer training, specialized product administration requirements or medications limited to certain specialty pharmacy networks by manufacturers.

Through a combination of assets and capabilities, we work to provide an enhanced level of predictable care and therapy management for customers taking specialty medications, increased visibility and improved outcomes for payors and custom programs for biopharmaceutical manufacturers.

Accredo is focused on dispensing injectable, infused, oral and inhaled drugs that require a higher level of clinical service and support than traditional pharmacies typically offer.

Accredo supports successful outcomes for customers and reduces waste for clients through specialty trained clinicians, a nationwide footprint and a network of in-home nursing services, reimbursement and customer assistance programs and biopharmaceutical services.

Drug manufacturers may select Accredo for exclusive dispensing of highly specialized therapies.

Freedom Fertility Pharmacy is dedicated exclusively to supporting customers undergoing

(1) Non-specialty network scripts filled through 90-day programs and home delivery scripts are multiplied by three.

All other network and specialty scripts are counted as one script.

fertility treatment.

Accredo and Freedom Fertility Pharmacy serve customers within a pharmacy benefit plan administered by Express Scripts PBM, as well as customers in plans administered by other PBMs and health plans.

• Benefits Management Solutions.

We drive high-quality, cost-effective care through prescription drug utilization and cost management services.

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We focus our solutions to align with our clients' service, care and cost management needs.

As a result, we believe we deliver better outcomes, higher customer satisfaction and a more affordable prescription drug benefit.

We process drug claims via Express Scripts Pharmacy, Accredo and our retail networks by integrating retail network pharmacy administration, benefit design consultation, drug utilization review, drug formulary management and pharmacy fulfillment services.

As a result, we believe we deliver better care, healthier outcomes, higher customer satisfaction and a more affordable prescription drug benefit.

We dispense drug claims via Express Scripts Pharmacy, Accredo and our retail networks by integrating retail network pharmacy administration, benefit design consultation, drug utilization review, drug formulary management and pharmacy fulfillment services.

We administer payments to retail networks and bill benefits costs to our clients through our end-to-end adjudication services.

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myMatrixx leverages Express Scripts' robust pharmacy network and provides a smooth and personalized experience for clients and injured workers.

◦ eviCore Medical Benefits Management.

eviCore healthcare is a leading provider of integrated health benefit management solutions that focus on driving adherence to evidence-based clinical guidelines, improving the quality of patient outcomes and reducing the cost of care.

eviCore provides technology-enabled managed solutions in clinical diagnostic areas such as advanced imaging, cardiology and gastroenterology, as well as in whole person (longitudinal) areas such as musculoskeletal, oncology, fertility and post-acute care.

eviCore contracts with health plans and other commercial and government payors to promote the appropriate use of health care services by the customers they serve.

In certain instances, this occurs through capitated risk arrangements, when we assume the financial obligation for the cost of health care services provided to eligible customers covered by eviCore health care management programs.

(1) Non-specialty network scripts filled through 90-day programs and home delivery scripts are multiplied by three.

All other network and specialty scripts are counted as one script.

◦ Medical Drug Management.

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◦ FamilyPath.

FamilyPath is raising the bar for fertility health by providing more comprehensive, more flexible coverage and proactive care for growing families, including expanded medical and pharmacy benefit management;

FamilyPath is raising the bar for fertility health by providing more comprehensive and more flexible coverage and proactive care for growing families, including expanded medical and pharmacy benefit management;

access to vetted provider and lab networks;

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All retail pharmacies in our network communicate with us online and in real-time to process prescription drug claims.

When a plan customer presents their identification card at a network pharmacy, the pharmacy sends specific customer, prescriber and prescription information in an industry-standard format through our systems, which process the claim and respond to the pharmacy with relevant information to process the prescription.

◦ Drug Formulary Management.

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We administer specific formularies on behalf of our clients, including standard formularies developed and offered by Express Scripts and custom formularies in which we play a more limited role.

Most of our clients select standard formularies, governed by our National Pharmacy & Therapeutics Committee, which is comprised of a panel of independent physicians and pharmacists in active clinical practice representing

a variety of specialties and practice settings, typically with major academic affiliations.

In making formulary recommendations, this committee considers only the drug's safety and efficacy and not the cost of the drug, including any negotiated manufacturer discount or rebate arrangement.

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◦ Enhanced Fraud, Waste & Abuse.

Evernorth helps plan sponsors identify potential problem customers and prescribers with unusual or excessive utilization patterns.

We help plan sponsors identify potential problem customers and prescribers with unusual or excessive utilization patterns.

The program is designed to help identify outliers and situations of abnormal use or prescribing patterns by analyzing types of prescriptions, refill patterns and pharmacy utilization.

◦ Administration of Group Purchasing Organizations.

Evernorth operates various group purchasing organizations that negotiate pricing for the purchase of pharmaceuticals and formulary rebates with pharmaceutical manufacturers on behalf of their participants.

We operate various group purchasing organizations that negotiate pricing for the purchase of pharmaceuticals and formulary rebates with pharmaceutical manufacturers on behalf of their participants.

They also provide various administrative services to their participants including management and reporting.

◦ Copay Solutions.

Our first-to-market innovative copay solutions helps customers afford their medications, protect plan design preferences and achieve lower trend.

In partnership with SaveOnSP on the first non-essential health benefits copay assistance solution, we've driven significant savings by targeting high-cost, high-volume drugs.

Our first-to-market innovative copay solutions help customers afford their medications, protect plan design preferences and achieve lower trend.

Our partnership with SaveOnSP on the first non-essential health benefits copay assistance solution has driven significant savings by targeting high-cost, high-volume drugs.

SaveOnSP recommends plan design and coverage changes for certain drugs, enabling maximum savings and reducing plan and client costs.

As manufacturer programs and regulations change, this aggressive solution adapts, delivering lower specialty plan cost and enhanced customer support.

Inside Rx is a prescription medication savings program that offers eligible customers discounts on many brand and generic medications for self-paying customers.

Inside Rx is a prescription medication savings program that offers eligible self-paying customers discounts on many brand and generic medications.

This program is not insurance but offers savings at more than 60,000 participating retail pharmacies (including all major chains) in the United States and Puerto Rico.

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◦ Evernorth Wholesale Marketplace.

Evernorth Wholesale Marketplace offers a suite of flexible, private label solutions including Pharmacy Rebate Program services, Retail Network Program services, SafeGuardRx, Medical Rebate Program and Utilization Management.

Evernorth Wholesale Marketplace offers a suite of flexible, private label solutions including but not limited to Wholesale Marketplace Drug Formulary Management services, Retail Network Programs, Value-Based Solutions, Medical Rebate Programs and Utilization Management Policies.

These offerings are captured under either our drug formulary administrative service arrangements or our formulary processing arrangements.

As the needs of the market evolve, we will continue to partner with clients and develop additional offerings that align with their goals and objectives.

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▪ Express Scripts Patient Assurance Program.

This program addresses the need for greater affordability and access to medications by providing a fixed out-of-pocket cost to customers in non-government funded benefit plans.

• Care Delivery and Care Management Solutions.

We offer clinical programs to help our clients drive better whole-person health outcomes at a lower cost by identifying and addressing potentially unsafe or wasteful prescribing, dispensing and use of prescription drugs and communicating with, or supporting communications with, physicians, pharmacies and customers.

◦ MDLIVE telehealth services provide flexibility for the customer to access a network of telehealth providers for routine primary care and wellness, urgent care, dermatology care and behavioral health care needs.

◦ Our inMynd Behavioral Health solution provides access to expert guidance and support for anxiety, depression and insomnia, including access to individualized support and resources, condition-specific care through our Neuroscience Therapeutic Resource Centers and a digital Cognitive Behavioral Therapy.

◦ Health Connect 360 is a transformational, outcomes based, clinical management model that bridges pharmacy, medical, lab and biometric data to develop insights and deliver personalized health care clinical support.

This program addresses affordability challenges for customers managing their diabetes and cardiovascular conditions by providing a lower, fixed, out-of-pocket cost directly to the customer.

Express Scripts negotiates additional discounts to reduce customer cost share without increasing plan cost, and applies those discounts at the point of service.

By making the cost of medication affordable and predictable, the Express Scripts Patient Assurance Program improves medication adherence, driving better customer outcomes and lower downstream medical costs for the plan.

• Home Delivery Pharmacy.

Evernorth Health Services offers free standard shipping of medications nationwide, usually in a 90-day supply, directly to the customer's home and allows for automatic refills on eligible medications and unrestricted telephone access to over 4,000 customer care advocates and specially trained pharmacists to answer customer questions.

The Home Delivery Pharmacy operations consist of ten home delivery pharmacies and four high-volume automated dispensing pharmacies located throughout the United States.

Our high-volume automated dispensing pharmacies are located in Arizona, Indiana, Missouri and New Jersey.

• Specialty Pharmacy.

Specialty medications are primarily characterized as high-cost medications for the treatment of complex and rare diseases.

Through a combination of assets and capabilities, we work to provide an enhanced level of predictable care and therapy management for customers taking specialty medications, leading to increased visibility and improved outcomes for payors and custom programs for biopharmaceutical manufacturers.

The launch of biosimilars to blockbuster specialty therapies provides competition and an opportunity to drive down costs for both customers and clients.

We work closely with clients to efficiently support each benefit design to improve affordability.

Accredo is focused on dispensing injectable, infused, oral and inhaled drugs that require a higher level of clinical service and support than traditional pharmacies typically offer.

Drug manufacturers may select Accredo for exclusive dispensing of highly specialized therapies.

Freedom Fertility Pharmacy is dedicated exclusively to supporting customers undergoing fertility treatment.

Accredo and Freedom Fertility Pharmacy serve customers within a pharmacy benefit plan administered by Express Scripts PBM, as well as customers in plans administered by other PBMs and health plans.

Our Specialty Pharmacy operations consist of 33 specialty pharmacies.

• Distribution.

CuraScript SD is a specialty distributor of pharmaceuticals and medical supplies (including injectable and infusible pharmaceuticals and medications to treat specialty and rare or orphan diseases) directly to health care providers, clinics and hospitals in the United States for office or clinic administration.

Through this business, we provide distribution services primarily to office and clinic-based physicians who treat customers with chronic diseases and regularly order costly specialty pharmaceuticals.

This business provides competitive pricing on pharmaceuticals and medical supplies, operates three distribution centers and ships most products overnight within the United States;

it also provides distribution capabilities

to Puerto Rico and Guam.

It is a contracted supplier with most major group purchasing organizations and leverages our distribution platform to operate as a third-party logistics provider for several pharmaceutical companies.

• Care Delivery and Management Solutions.

We offer clinical programs to help our clients drive better whole-person health outcomes through our Care Delivery (virtual care, in-home care, physical primary care) and Care Management (behavioral health services and health coaching capabilities) offerings.

eviCore healthcare is a medical benefits management organization that is a leading provider of solutions that ensure customers receive optimal treatment at the right site of care by leveraging our team of medical professionals, evidence-based guidelines and innovative technologies to deliver affordable care.

eviCore provides integrated solutions for key clinical diagnostic areas such as advanced imaging, cardiology and gastroenterology, as well as longitudinal areas such as musculoskeletal, oncology and post-acute care.

eviCore contracts with health plans to promote the appropriate use of health care services by the customers they serve.

MDLIVE virtual care services provide flexibility for the customer to access a network of virtual care providers for preventative and routine primary care and wellness, urgent care, dermatology care, behavioral health care needs and chronic condition management beginning with hypertension.

◦ Behavioral health .

Our behavioral health solutions simplify the complicated treatment landscape by assisting members to the right level of care at the right time, in the right place - from start to finish.

Our predictive analytics models proactively identify customers who need support so that we can engage them early and provide the appropriate care, leveraging our extensive provider network including in-person providers, virtual providers and digital tools.

Our Evernorth inMynd Behavioral Health and inMyndRx solutions provide access to expert guidance and support for anxiety, depression, insomnia, ADHD, narcolepsy, Alzheimer's and select mood stabilizing medications.

These solutions include providing access to individualized support and educational resources, condition-specific care through our Neuroscience Therapeutic Resource Centers and digital Cognitive Behavioral Therapy program when applicable.

◦ Health Connect 360 .

This program is a transformational, outcomes-based, clinical management model that bridges pharmacy, medical, lab and biometric data to develop insights and deliver personalized health care clinical support.

Clinical outcomes and quality metrics are tailored to meet client needs.

◦ RationalMed improves patient health and safety by integrating medical, pharmacy and laboratory claims data to initiate changes and correct errors in care, lowering both medical and prescription drug costs.

◦ RationalMed .

RationalMed improves customer health and safety by integrating medical, pharmacy and laboratory claims data to initiate changes and correct errors in care, lowering both medical and prescription drug costs.

◦ Evernorth Digital Health Formulary .

Through the Evernorth Digital Health Formulary, we evaluate, procure, implement and manage digital health solutions on behalf of clients, alleviating administrative burden and ensuring clinical effectiveness, data security, user-friendly experiences and financial value.

◦ Cigna Pathwell Specialty .

Cigna Pathwell Specialty is designed to address one of our clients' top health care cost drivers - specialty drugs - enabling clients to reinvest in their employees, making health care more affordable.

This new solution controls specialty spending across the medical and pharmacy benefits by integrating pharmacy network and care coordination for customers who need our support the most.

◦ Evernorth Intelligence Solutions .

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Trend Central provides access to key performance indicators to help plan sponsors reduce costs and work towards healthier outcomes;

HealthPredict produces high patient-level risk scores, to show the highest value opportunities for proactive intervention;

HealthPredict produces high customer-level risk scores, to show the highest value opportunities for proactive intervention;

MediCUBE gives our academic detailing pharmacists the analytical power to identify ways to save plans from significant unnecessary spend and improve quality metrics;

and ScriptVision provides a suite of real-time, data-driven capabilities that empower physicians to make the best prescribing choices, including ePrescribing (including controlled substances), real-time prescription benefit information, electronic prior authorizations, clinical care messages such as drug interactions and high-risk medication alerts and data on patient adherence rates.

• Provider Services.

Through this business, we provide distribution services primarily to office and clinic-based physicians who treat customers with chronic diseases and regularly order costly specialty pharmaceuticals.

This business provides competitive pricing on pharmaceuticals and medical supplies, operates three distribution centers and ships most products overnight within the United States;

it also provides distribution capabilities to Puerto Rico and Guam.

It is a contracted supplier with most major group purchasing organizations and leverages our distribution platform to operate as a third-party logistics provider for several pharmaceutical companies.

We provide products and services in the Evernorth segment to clients and customers, as described below.

Also described below are our current and former significant clients.

and ScriptVision provides a suite of real-time, data-driven capabilities that empower physicians to make the best

prescribing choices, including ePrescribing (including controlled substances), real-time prescription benefit information, electronic prior authorizations, clinical care messages such as drug interactions and high-risk medication alerts and data on customer adherence rates.

We provide products and services in the Evernorth Health Services segment to clients and customers, as described below.

Also described below are our significant clients.

We provide services to managed care organizations, health insurers, third-party administrators, employers, union-sponsored benefit plans, workers' compensation plans, government health programs, providers, clinics, hospitals and others.

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Under this contract, we provide online claims adjudication, home delivery services, specialty pharmacy clinical services, claims processing and contact center support and other services critical to managing pharmacy trend.

In 2021, the DoD awarded Express Scripts a 7-year pharmacy program contract beginning January 1, 2023.

In 2021, the DoD awarded Express Scripts a seven-year pharmacy program contract beginning January 1, 2023.

Under the new contract, Express Scripts will provide enhanced specialty care and expanded care coordination capabilities, while continuing to support current pharmacy operations, through 2029.

Revenues from this contract are significant to the segment.

In 2019, Express Scripts and Prime Therapeutics LLC ("Prime") entered into an agreement effective on April 1, 2020 to deliver improved choice and affordability for Prime's clients and their customers by enhancing retail pharmacy networks and pharmaceutical

manufacturer value.

In 2022, Prime and Express Scripts agreed to extend this relationship through 2025.

In 2021, the relationship with Prime was expanded to include the option for Prime's plans to access the Accredo specialty pharmacy and Express Scripts home delivery in-network pharmacies.

Revenues from these contracts are significant to the segment.

On January 30, 2019, Anthem, Inc.

("Anthem"), a former customer, exercised its right to early termination of its pharmacy benefit management services agreement, effective March 1, 2019.

As of December 31, 2019, the transition of customers was substantially complete.

For further discussion of our Anthem relationship, see the "Executive Overview – Key Transactions and Business Developments" section of our MD&A located in Part II, Item 7 of this Form 10-K.

In October 2022, Evernorth Health Services and Centene Corporation ("Centene") announced a multi-year agreement effective January 2024 to manage pharmacy benefit services and make prescription medications more accessible and affordable for Centene's approximately 20 million customers.

In addition to greater savings on prescription drugs, Centene customers will also have access to Express Scripts' extensive national network of retail pharmacies.

The health care industry has undergone periods of substantial consolidation and may continue to consolidate in the future.

Many of the largest managed care organizations now also own health services businesses that compete with Evernorth in the verticals in which we participate.

Many of the largest managed care organizations now also own health services businesses that compete with Evernorth Health Services in the verticals in which we participate.

We believe the primary competitive factors in the industry include the ability to:

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manage cost and quality of specialty drugs;

use the information we obtain about drug utilization patterns and consumer behavior to reduce costs for our clients and customers and the level of service we provide.

and use the information we obtain about drug utilization patterns and consumer behavior to reduce costs for our clients and customers and assess the level of service we provide.

• Managed Care PBMs.

CVS Caremark (owned by CVS Health Corporation), Humana, IngenioRx (owned by Anthem, Inc.), OptumRx (owned by UnitedHealth Group Inc.) and Prime Therapeutics (owned by a collection of Blue Cross / Blue Shield Plans) compete with us on a variety of products and in various regions throughout the United States.

CVS Caremark (owned by CVS Health Corporation ("CVS")), Humana Inc.

("Humana"), IngenioRx (owned by Elevance Health Inc.

("Elevance")), OptumRx (owned by UnitedHealth Group Inc.

("UnitedHealth")) and Prime Therapeutics (owned by a collection of Blue Cross / Blue Shield Plans) compete with us on a variety of products and in various regions throughout the United States.

• Independent PBMs.

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With the emergence of alternative benefit models through private exchanges, the competitive landscape also includes brokers, health plans and consultants.

Some of these competitors may deploy greater financial, marketing and technological resources than we do and new market entrants, including strategic alliances aimed at modifying the current health care delivery models or entering the prescription drug sector from another sector of the health care industry, may increase competition as barriers to entry are relatively low.

Some of these competitors may deploy greater financial, marketing and technological resources than we do and new market entrants, including strategic alliances aimed at

modifying the current health care delivery models or entering the prescription drug sector from another sector of the health care industry, may increase competition as barriers to entry are relatively low.

For example, GoodRx is an entrant focused on serving the uninsured and underinsured in the cash pay pharmacy administration space.

• Care Delivery and Care Management Solutions Providers.

OptumHealth, NaviHealth and Landmark (UnitedHealth Group Inc.);

Beacon, Aspire and CareMore (Anthem, Inc.);

CVS' HealthHubs and MinuteClinics;

Kindred and oneHome (Humana Inc.);

Community and Bayless (Centene Corporation);

• Care Delivery and Management Solutions.

OptumHealth, NaviHealth and Landmark (UnitedHealth);

Beacon, Aspire and CareMore (owned by Elevance);

CVS's HealthHubs and MinuteClinics;

CenterWell Home Health (Humana);

Community and Bayless (Centene);

VillageMD, Teladoc, Doctor on Demand, MeMD, WalmartHealth and AmazonCare are among the companies that compete with us in this market.

• Clinical Solutions and Health Care Data Analytics Companies.

Optum (owned by UnitedHealth Group Inc.), Anthem, Magellan Health (owned by Centene Corporation), Apixio, HealthHelp, Cotiviti and Inovalon are among the companies that compete with us in this market.

Optum (owned by UnitedHealth), Elevance, Magellan Health and Apixio (owned by Centene Corporation), HealthHelp, Cotiviti and Inovalon are among the companies that compete with us in this market.

• Sales and Account Management.

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Our services include access to:

◦ Triage for crisis care, safely guiding customers in their most vulnerable moments

◦ Support for the individual and their caregivers from crisis care in their most vulnerable moments to stabilization and returning back to work and life for all involved

◦ Comprehensive behavioral health offerings including network access, utilization management and coordination of care to treat conditions ranging from depression and anxiety to substance use, autism and eating disorders

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We purchase pharmaceuticals either directly from manufacturers or through authorized wholesalers.

Evernorth uses one wholesaler more than others in the industry, but holds contracts with other wholesalers if needs for an alternate source arise.

Evernorth Health Services uses one wholesaler more than others in the industry, but holds contracts with other wholesalers if needs for an alternate source arise.

Generic pharmaceuticals are generally purchased directly from manufacturers.

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See the "Executive Overview - Key Transactions and Business Developments" section of our MD&A located in Part II, Item 7 of this Form 10-K for discussion of key developments impacting this segment.

Intellectual Property Rights

The trademarks and service marks covering products, services and businesses provided under the Evernorth segment include, but are not limited to, the following:

EXPRESS SCRIPTS ® , EVERNORTH SM , EVERNORTH HEALTH SM , MEDCO ® , ACCREDO ® , CURASCRIPTSD ® , MYMATRIXX ® , EVICORE HEALTHCARE ® , FREEDOM FERTILITY PHARMACY ® , VERITY ® , MDLIVE ® , QUALLENT PHARMACEUTICALS SM , RATIONALMED ® , SCREENRX ® , EXPRESSALLIANCE ® , EVERNORTH DIGITAL HEALTH FORMULARY SM , THERAPEUTIC RESOURCE CENTER ® , ADVANCED OPIOID MANAGEMENT ® , EXPRESS SCRIPTS SAFEGUARDRX ® , HIV CARE VALUE ® , RARE CONDITIONS CARE VALUE ® , NEUROLOGICAL CARE VALUE ® , CARDIOVASCULAR CARE VALUE ® , HEPATITIS CURE VALUE ® , MARKET EVENTS PROTECTION SM , ONCOLOGY CARE VALUE SM , PULMONARY CARE VALUE ® , MULTIPLE SCLEROSIS CARE VALUE SM , CHOLESTEROL CARE VALUE SM , HEALTH CONNECT 360 ® , EMBARC BENEFIT PROTECTION ® , INMYND SM , EXPRESS SCRIPTS PATIENT ASSURANCE ® , MEDICUBE ® , EXPRESS SCRIPTS PHARMACY ® , FAMILYPATH SM , SCRIPTVISION ® , INSIDE RX ® , EXPRESS SCRIPTS MEDRX MANAGEMENT ® , WEIGHT MANAGEMENT CARE VALUE SM and EVERNORTH WHOLESALE MARKETPLACE SM .

We, or our affiliated companies, own trademarks and trademark registrations for these and other company marks.

We also hold a portfolio of patents and pending patent applications.

We are not substantially dependent on any single patent or group of related patents.

CIGNA HEALTHCARE

Cigna Healthcare includes Cigna's U.S.

Cigna Healthcare includes the U.S.

Commercial, U.S.

Government and International Health operating segments that provide comprehensive medical and coordinated solutions to clients and customers.

Commercial products and services include medical, pharmacy, behavioral health, dental, vision, health advocacy programs and other products and services for insured and self-insured customers.

Government solutions include Medicare Advantage, Medicare Supplement and Medicare Part D plans for seniors, and individual health insurance plans both on and off the public exchanges.

International Health solutions include health care coverage in our international markets, as well as health care benefits for globally mobile individuals and employees of multinational organizations.

Government and International Health operating segments, which provide comprehensive medical and coordinated solutions to clients and customers.

Within Cigna Healthcare, U.S.

Commercial and International Health are our foundational growth businesses and U.S.

Government is our accelerated growth business.

In 2022, Cigna Healthcare reported adjusted revenues of $45.0 billion and pre-tax adjusted income from operations of $4.1 billion.

In 2021, in connection with the pending Chubb Transaction described in the "Overview" section of this Form 10-K, we updated our reporting segments to align with the new management structure.

The Cigna Healthcare segment is comprised of the previously named U.S.

Medical segment and the businesses to be retained from the previous International Markets segment.

· Broad and deep portfolio of solutions across U.S.

Commercial, U.S.

Government and International Health operating segments

· Commitment to highest-quality health outcomes and customer experiences

· Collaborative physician engagement models emphasizing value over volume of services

· Integrated and coordinated benefit solutions that deliver value for our customers, clients and partners

· Technology and data analytics powering actionable insights and affordable, predictable solutions

· Talented and caring people embracing change and putting customers at the center of all we do

Our results are driven by our ability to deliver value through our integrated product and service offerings and to leverage data and analytics to control medical costs and enable better health outcomes.

We differentiate ourselves by providing innovative, personalized and affordable health care benefit solutions based on the unique needs of the individuals and clients we serve.

We deliver value through our integrated approach and use of technology, including digital and data analytics, to enhance patient engagement and health care outcomes, underscoring our strategic focus on delivering an industry-leading customer experience.

We continue to strengthen our collaborative relationships with providers through value-based reimbursement.

We offer a mix of medical insurance products and services to employers, other groups and individuals along with specialty products and services designed to improve the quality of care, lower costs and help customers achieve better health outcomes.

Many of these products are available on a standalone basis, but we believe they create additional value when integrated with a Cigna-administered health plan.

Our products are available through several distribution channels including brokers, direct sales and public and private exchanges.

Our three funding solutions (i.e., administrative services only ("ASO"), insured – guaranteed cost ("GC") and insured – experience-rated ("ER") arrangements) enable us to customize the amount of risk taken by, and lower costs for, our clients.

• Clinical programs to support the highest-quality health outcomes and customer experiences

• Partnership with high-performing providers , emphasizing value over volume of services

• Differentiated approach to understanding clients and responding to evolving workforce needs to improve employee productivity and drive more consistent performance

• Innovative coordinated benefit solutions that deliver value for our customers, clients and partners

• Technology and data analytics powering actionable insights and promoting solutions to improve health and vitality with greater precision and personalization

• Talented, experienced and caring people who work as consultative partners in aligning client and customer needs to our solutions and putting those we serve at the center of all we do

By offering a mix of services and medical insurance products to employers, groups and individuals along with specialty products, we improve the quality of care, lower costs and help customers achieve better health outcomes.

Many of these products are available on a standalone basis, but we believe they create additional value and savings when integrated with a Cigna Healthcare-administered health plan.

The following chart depicts a high-level summary of our principal products and services in this segment, with definitions on subsequent pages.

Principal Products & Services Major Brand(s) Geography Funding Solution(s) Market Segment(s) Primary Distribution Channel(s) Primary Competitors

Principal Products & Services Major Brand(s) Geography Funding Solution(s) (1)

Market Segment(s) Primary Distribution Channel(s) Primary Competitors

Commercial Medical

Managed Care Cigna Nationwide GC, ER, ASO U.S.

Managed Care Cigna Healthcare Nationwide GC, ER, ASO U.S.

Brokers, Private Exchanges, Direct National Insurers, Local Healthplans, Third-Party Administrators ("TPAs")

Preferred Provider Organization ("PPO") Cigna Nationwide National Insurers, Local Healthplans, TPAs

Consumer-Driven Cigna Nationwide National Insurers, Local Healthplans

Preferred Provider Organization ("PPO") National Insurers, Local Healthplans, TPAs

Consumer-Driven National Insurers, Local Healthplans

Government Medical

Individual and Family Plans Cigna 10 states (1)

Public Exchanges, Brokers, Direct Local Healthplans, Provider-led Plans, National Insurers

Medicare Advantage Cigna 25 states (2) & District of Columbia

Direct, Brokers National Insurers, Local Healthplans

Medicare Stand –Alone Prescription Drug Plans Cigna, Express Scripts Nationwide GC, ASO U.S.

Direct, Brokers National Insurers

Medicare Supplement Cigna 48 states (3) & District of Columbia

Brokers, Direct, Private Exchanges National Insurers

Individual and Family Plans Cigna Healthcare 16 states (2)

Public Exchanges, Brokers, Direct National Insurers,

Local Healthplans, Provider-led Plans

Medicare Advantage Cigna Healthcare 29 states (3) & District of Columbia

GC Direct, Brokers National Insurers,

Local Healthplans,

Provider-led Plans

Medicare Stand –Alone Prescription Drug Plans Cigna Healthcare, Express Scripts Nationwide GC, ASO Direct, Brokers National Insurers

Medicare Supplement Cigna Healthcare 48 states (4) & District of Columbia

GC Brokers, Direct, Private Exchanges National Insurers

Specialty Products and Services

Stop-Loss Cigna Nationwide GC U.S.

Stop-Loss Cigna Healthcare Nationwide GC U.S.

Brokers, Direct National Insurers, Specialty Companies

Cost Containment Cigna Nationwide GC, ER, ASO U.S.

Direct National Insurers, Specialty Companies

Consumer Health Engagement Cigna Nationwide GC, ER, ASO U.S.

Cost Containment Cigna Healthcare GC, ER, ASO U.S.

National Insurers, Specialty Companies

Consumer Health Engagement Cigna Healthcare GC, ER, ASO U.S.

Commercial, U.S.

Brokers, Direct National Insurers, Specialty Companies

Pharmacy Management Cigna Nationwide GC, ER, ASO U.S.

National Insurers, Specialty Companies

Pharmacy Management Cigna Healthcare GC, ER, ASO U.S.

Commercial, U.S.

Brokers, Direct National PBMs

Behavioral Health Cigna Nationwide GC, ER, ASO U.S.

Brokers, Direct National Insurers, Specialty Companies

Dental & Vision Cigna Dental Care® Nationwide

Independent PBMs, Managed Care PBMs

Behavioral Health Cigna Healthcare GC, ER, ASO U.S.

Commercial, U.S.

National Insurers, Specialty Companies

Dental Cigna Dental Care®

GC, ER, ASO U.S.

Commercial, U.S.

Brokers, Direct Dental Insurers, National Insurers

(1) AZ, CO, FL, IL, KS, MO, NC, TN, UT, VA.

(2) AL, AZ, AR, CO, CT, DE, FL, GA, IL, KS, MD, MS, MO, NC, NJ, NM, OH, OK, OR, PA, SC, TN, TX, UT, VA.

(3) All states except MA and NY.

Dental Insurers, National Insurers

(1) Our three funding solutions include administrative services only ("ASO"), insured - guaranteed cost ("GC") and insured - experience-rated ("ER") arrangements.

(2) AZ, CO, FL, GA, IL, KS, MO, MS, NC, PA, TN, UT & VA.

Effective January 1, 2023, also includes IN, SC & TX.

(3) AL, AR, AZ, CO, CT, DE, FL, GA, IL, KS, MD, MO, MS, NC, NJ, NM, OH, OK, OR, PA, SC, TN, TX, UT, VA, VT & WA.

Effective January 1, 2023, also includes KY & NY.

(4) All states except MA & NY.

Principal Products & Services Major Brand(s) Geography Funding Solution(s) Market Segment(s) Primary Distribution Channel(s) Primary Competitors

International Health Products and Services

Global Health Care Cigna Global Health Benefits, Cigna Global Individual Health Worldwide (except as limited by applicable law)

GC, ER, ASO International Health

Global Health Care Cigna Global Health Benefits, Cigna Global Individual Health Worldwide (except as limited by applicable law) GC, ER, ASO International Health

Brokers, Direct Global insurers

Local Health Care Cigna, ManipalCigna, CignaCMB United Kingdom, Spain, Hong Kong, India, China, Singapore, Middle East, Thailand

International Health

Brokers, Direct Global insurers and local non-U.S.

Local Health Care Cigna Healthcare, ManipalCigna, CignaCMB China, Middle East, Singapore, Hong Kong, Spain, United Kingdom, India Global insurers and local non-U.S.

Principal Products & Services

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• Managed Care Plans are offered through our insurance companies, Health Maintenance Organizations ("HMOs") and TPA companies.

HMO, Surefit®, LocalPlus®, Network and Open Access Plus plans use meaningful cost-sharing incentives to encourage the use of "in-network" versus "out-of-network" health care providers.

HMO, LocalPlus®, Network and Open Access Plus plans use meaningful cost-sharing incentives to encourage the use of "in-network" versus "out-of-network" health care providers.

The national provider network for Managed Care Plans is smaller than the national network used with the PPO plan product line.

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• Medicare Advantage Plans allow Medicare-eligible customers to receive health care benefits, including prescription drugs, through a managed care health plan such as our coordinated care plans.

Our Medicare Advantage Plans include HMO and PPO plans marketed to individuals.

Our Medicare Advantage Plans include HMO and PPO plans marketed to individuals and qualified employer groups.

A significant portion of our Medicare Advantage customers receive medical care from our value-based models that focus on developing highly engaged physician networks, aligning payment incentives to improve health outcomes and using timely and transparent data sharing.

• Medicare Stand-Alone Prescription Drug ("Part D") Products provide a number of prescription drug plan options, as well as service and information support to Medicare-eligible individuals or individuals through a qualified employer group.

Our stand-alone plans offer the coverage of Medicare combined with the flexibility to select a product that provides enhanced benefits and a formulary that meets an individual's specific needs.

Our stand-alone plans offer the coverage of Medicare combined with the flexibility to select a product that provides enhanced benefits and a formulary that aligns with the individual's needs.

Eligible customers benefit from broad network access and enhanced service intended to promote adherence, wellness and affordability.

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Specialty Products and Services

• Stop-Loss insurance coverage is offered to self-insured clients whose group health plans are administered by Cigna.

• Stop-Loss insurance coverage is offered to self-insured clients whose group health plans are administered by Cigna Healthcare.

Stop-loss insurance provides reimbursement for claims in excess of a predetermined amount for individuals, the entire group, or both.

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These programs reduce out-of-network utilization and costs, protect customers from balance billing and educate customers regarding the availability of lower cost in-network services.

In addition, under these programs we negotiate discounts with out-of-network

providers, review provider bills and recover overpayments.

In addition, under these programs we negotiate discounts with out-of-network providers, review provider bills and recover overpayments.

We charge fees for providing or arranging for these services.

These programs may be administered by third-party vendors that have contracted with Cigna.

• Consumer Health Engagement services are offered to customers covered under plans administered by Cigna or by third-party administrators.

These programs may be administered by third-party vendors that have contracted with Cigna Healthcare.

• Consumer Health Engagement services are offered to customers covered under plans administered by Cigna Healthcare or by third-party administrators.

These services consist of an array of health management, disease management and wellness services.

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• Pharmacy Management services and benefits can be combined with our medical offerings.

The comprehensive suite of pharmacy management services are available to clients and customers through our integration with Evernorth's capabilities.

The comprehensive suite of pharmacy management services are available to clients and customers through our integration with Evernorth Health Services' capabilities.

• Behavioral Health services consist of a broad national network of behavioral health providers which includes one of the largest virtual networks in the United States, behavioral health specialty case and utilization management, a crisis intervention line accessible anytime, employee assistance programs and work/life programs.

We integrate our programs and services with medical, pharmacy and disability programs to facilitate customized, holistic care as well as to provide resources that increase resiliency and address non-medical factors that affect overall well-being.

• Dental & Vision solutions include dental HMO plans, dental PPO plans, exclusive dental provider organization plans, traditional dental indemnity plans and a dental discount program.

We integrate our programs and services with medical and pharmacy programs to facilitate customized, holistic care as well as to provide resources that increase resiliency and address non-medical factors that affect overall well-being.

• Dental solutions include dental HMO plans, dental PPO plans, exclusive dental provider organization plans, traditional dental indemnity plans and a dental discount program.

Employers and other groups can purchase our products on either an insured or self-insured basis as standalone products or in conjunction with medical products.

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• Global Health Care products and services include insurance and administrative services for medical, dental, pharmacy, vision and life, accidental death and dismemberment and disability risks.

We are leading providers of products and services that meet the needs of multinational employers, intergovernmental and nongovernmental organizations and globally mobile individuals with a focus on keeping employees healthy and productive.

We are a leading provider of products and services that meet the needs of multinational employers, intergovernmental and nongovernmental organizations and globally mobile individuals with a focus on keeping employees healthy and productive.

The employer benefits products and services are offered through guaranteed cost, experience-rated and administrative services only funding solutions, while individuals purchase guaranteed cost coverage.

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Commercial medical customers are in ASO arrangements.

In most states, individual and group insurance premium rates must be approved by the applicable state regulatory agency (typically department of insurance).

In most states, individual and group insurance premium rates must be approved by the applicable state regulatory agency (typically a department of insurance).

State or federal laws may restrict or limit the use of rating methods.

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Government medical plans are subject to minimum medical loss ratio ("MLR") requirements.

The MLR represents the percentage of premiums used to pay claims and expenses for activities that improve the quality of care.

The MLR represents the percentage of premiums used to pay

claims and expenses for activities that improve the quality of care.

If we do not satisfy the prescribed MLR, statutes require premium refunds to policyholders or to CMS.

See the "Business - Regulation" section of this Form 10-K for additional information about premiums, MLR requirements, Star Ratings and risk adjustment and risk mitigation programs of the ACA.

See the "Business - Regulation" section of this Form 10-K for additional information about premiums, MLR requirements, Star Ratings and risk adjustment programs of the ACA.

Market Segments

Commercial comprises employers from the following market segments:

Multi-state employers with 5,000 or more eligible employees.

We offer primarily ASO funding solutions in this market segment.

Commercial comprises the following market segments:

Employers with 3,000 or more eligible employees, primarily through ASO funding solutions.

◦ Middle Market.

Employers generally with 500 to 4,999 eligible employees.

This segment also includes single-site employers with more than 5,000 employees and Taft-Hartley plans and other groups.

We offer ASO and insured funding solutions in this market segment.

Employers generally with 51 to 499 eligible employees.

We usually offer ASO with stop-loss insurance coverage and guaranteed cost insured funding solutions in this market segment.

Employers generally with 500 to 2,999 eligible employees, solutions for third party payers, Taft-Hartley plans, as well as other groups, through ASO and insured funding solutions.

Employers generally with 51 to 499 eligible employees, primarily through ASO with stop-loss insurance coverage and insured funding solutions.

◦ Small Group.

Employers generally with 2 to 50 eligible employees.

We offer guaranteed cost insured funding solutions in select geographies with a strategic partner, Oscar Health, in this market segment.

We offer guaranteed cost insured funding solutions in select geographies with our Cigna + Oscar product.

Government comprises the following market segments:

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Includes individuals under age 65 who do not have access to health care coverage through an employer or government program such as Medicare or Medicaid.

We offer guaranteed cost, medical ACA-compliant and dental plans in this segment.

Includes individuals who are Medicare-eligible customers, as well as employer group sponsored pre- and post-65 retirees.

We receive revenue from CMS based on customer demographic data and health risk factors.

Revenues from CMS were significant to the segment.

• International Health market segments include multinational employers, globally mobile individuals and employers and individuals in specific countries.

We offer guaranteed cost, medical ACA-compliant and dental plans in this market segment.

Includes individuals who are Medicare-eligible customers, as well as employer group sponsored post-65 retirees.

We receive Medicare Advantage revenue from CMS based on customer demographic data and health risk factors.

Revenues from CMS are significant to the market segment.

• International Health comprises market segments offering international plans to multinational employers and globally mobile individuals, and domestic plans to employers and individuals in specific countries outside of the U.S.

Employer plans in the International Health segment may be ASO or fully insured plans.

We provide clients and customers with access to a mix of medical and specialty products and services.

Our clients include employers, union-sponsored benefit plans, workers' compensation plans, government health programs and other groups which span our operating segments.

Our customers include individuals who access our offerings through an employer-sponsored plan, government-sponsored plan, or other insured group, either through in-person providers or virtual telehealth providers.

Our clients include employers, third-party administrators, union-sponsored benefit plans, government health programs and other groups which span our operating segments.

Our customers include individuals who access our offerings through an employer-sponsored plan, government-sponsored plan, or other insured group.

Primary Distribution Channels

Sales representatives distribute our products and services to a broad group of insurance brokers and consultants.

Cigna sales representatives distribute our products and services directly to employers, unions and other groups or individuals.

Cigna Healthcare sales representatives distribute our products and services directly to employers, unions and other groups or individuals.

Various products may also be sold directly to insurance companies, HMOs and third-party administrators.

Direct distribution may take the form of in-person contact, telephone or group selling venues, or an online direct to consumer enrollment platform for our individual market segment.

Direct distribution may take the form of in-person contact, telephone or group selling venues, or online direct to consumer enrollment platforms.

• Private Exchanges.

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• Public Exchanges.

Cigna offers individual ACA-compliant policies through public health insurance exchanges in select geographies.

Cigna Healthcare offers individual ACA-compliant policies through public health insurance exchanges in select geographies.

The primary competitive factors affecting our business are quality of care and cost effectiveness of service and provider networks;

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total cost management;

and effectiveness of marketing and sales.

Financial strength, as indicated by ratings issued by nationally recognized rating

agencies, is also a competitive factor.

Our health advocacy capabilities, holistic approach to consumer engagement, breadth of product offerings, clinical care and health management capabilities along with an array of product funding solutions are competitive advantages.

We believe our focus on improving the health, well-being and peace of mind of those we serve and how we deliver better affordability, predictability and simplicity in health care will allow us to further differentiate ourselves.

technology and effectiveness of marketing and sales.

Financial strength, as indicated by ratings issued by nationally recognized rating agencies, is also a competitive factor.

We believe our focus on improving the health and vitality of those we serve will allow us to further differentiate ourselves.

• National Insurers.

United HealthGroup Inc., Aetna Inc.

(owned by CVS Health Corporation), Anthem Inc., Humana Inc.

and Blue Cross Blue Shield plans compete with us in a variety of products and regions.

UnitedHealth, Aetna Inc.

(owned by CVS), Elevance, Humana and Blue Cross Blue Shield plans compete with us in a variety of products and regions.

• Local Healthplans.

Blue Cross Blue Shield plans, local affiliates of major insurance companies and hospitals and regional stand-alone managed care and specialty companies compete with us in the states in which we offer managed care products.

Additionally, plan sponsors may contract directly with providers.

Third-party administrators compete with us for ASO business.

• Provider-led Plans.

Emerging participants include alternative health service models and other health plans seeking to disrupt, often through competitive technology.

Include health systems and hospitals who integrate health plan offerings with care delivery.

Additionally, plan sponsors may contract directly with providers.

• Dental Insurers.

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insurers compete with us through product and service offerings.

Partnering to Deliver on the Promise of More Affordable, Predictable, Simple Health Care

Cigna's strategy engages customers in their health, collaborates with providers to help them improve their performance and connects customers and providers through aligned health goals, incentives and actionable information to help enable informed decisions and drive better outcomes.

Fueled by advanced insights and predictive analytics, Cigna is committed to developing innovative solutions that span the health care delivery system and can be applied to a multitude of providers.

Partnering to Advance our Growth Strategy

Cigna Healthcare's strategy engages customers in their health, collaborates with providers to help them improve their performance and connects customers and providers through aligned health goals, incentives and actionable information to help enable informed decisions and drive better outcomes.

Continuing to expand the breadth and depth of Evernorth Health Services care services, pharmacy services and benefits management will further reduce the total cost of care for our clients and customers.

Fueled by advanced insights and predictive analytics, Cigna Healthcare continues to develop innovative solutions that span the health care delivery system and can be applied to a multitude of providers.

• Accountable Care Program.

We have approximately 239 collaborative care arrangements with primary care groups built on the patient-centered medical home and accountable care organization ("ACO") models.

We have made adjustments to the program to deepen our partnerships in responding to the challenges and needs arising from the COVID-19 pandemic.

Program flexibility allowed adjustments in response to the COVID-19 pandemic designed to maintain appropriate focus on high-risk individuals and populations with chronic conditions impacted by Social Determinants of Health.

As we emerge from the pandemic, we are leveraging new models to increase provider adoption of upside and downside risk sharing to drive better health outcomes and lower the total cost of care.

• Hospital Quality Program.

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• Specialist Programs.

We have approximately 280 arrangements with specialist groups in value-based reimbursement arrangements.

These arrangements include specialties in orthopedics, obstetrics and gynecology, cardiology, gastroenterology, oncology, nephrology and neurology.

We have approximately 266 arrangements with specialist groups in value-based reimbursement arrangements across six different disciplines.

Arrangements include incentives for enhanced care coordination and episodes of care reimbursements for meeting cost and quality goals.

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We encourage access for customers through MDLIVE telehealth services as a way to support the patient/provider relationship.

MDLIVE telehealth services provide flexibility for the customer to access a network of telehealth providers for routine primary care and wellness, urgent care, dermatology care and behavioral health care needs.

MDLIVE telehealth services provide flexibility for the customer to access a network of telehealth providers for services including preventative and routine primary care and wellness, urgent care, dermatology care, behavioral health care needs and chronic condition management beginning with hypertension.

Key Transactions and Business Developments

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OTHER OPERATIONS

Other Operations includes the following businesses:

• Ongoing business:

• Corporate-Owned Life Insurance ("COLI") offers permanent insurance contracts sold to corporations to provide coverage on the lives of certain employees for financing employer-paid future benefit obligations.

• Exiting businesses:

• International Life, Accident and Supplemental Benefits Businesses in seven countries to be sold pursuant to the Chubb Transaction as described in the "Overview" section of this Form 10-K.

• Group Disability and Life.

Prior to the sale of the U.S.

Group Disability and Life business on December 31, 2020 (see Note 4 to the Consolidated Financial Statements for additional information), this operating segment provided group long-term and short-term disability, group life, accident, voluntary and specialty insurance products and related services.

• Run-off businesses:

• Reinsurance is predominantly comprised of guaranteed minimum death benefit ("GMDB") and guaranteed minimum income benefit ("GMIB") business effectively exited through reinsurance with Berkshire Hathaway Life Insurance Company of Nebraska ("Berkshire") in 2013.

• Settlement Annuity business in run-off.

• Individual Life Insurance and Annuity and Retirement Benefits Businesses are comprised of deferred gains from the sales of these businesses.

Other Operations comprises the remainder of our business operations, which includes certain ongoing businesses and exiting businesses.

Our ongoing businesses include our continuing business, COLI, as described below, as well as our run-off businesses.

Our run-off businesses include (i) GMDB and GMIB business that were effectively exited through reinsurance with Berkshire Hathaway Life Insurance Company of Nebraska ("Berkshire") in 2013, (ii) settlement annuity business, and (iii) individual life insurance and annuity and retirement benefits businesses comprised of deferred gains from the sales of these businesses.

Our exiting businesses include our interest in a joint venture in Türkiye, which was sold to our partner in December 2022, the international life, accident and supplemental benefits businesses sold on July 1, 2022, and the Group Disability and Life business sold on December 31, 2020.

In 2022, Other Operations reported adjusted revenues of $2.3 billion and pre-tax adjusted income from operations of $500 million.

Other Operations was previously named Group Disability and Other.

Ongoing Business

Ongoing Businesses

Continuing Business

Corporate-Owned Life Insurance

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To reduce our exposure to large individual losses, we purchase reinsurance from unaffiliated reinsurers.

Exiting Businesses

International Life Accident and Supplemental Benefits

These businesses, which are subject to a definitive sales agreement (Chubb Transaction) described in the "Overview" section of this Form 10-K, offer life, accident and supplemental benefits insurance products and services in Hong Kong, Indonesia, New Zealand, South Korea, Taiwan, Thailand and our interest in a joint venture in Turkey.

South Korea represents our single largest geographic market for these businesses.

Supplemental health, life and accident insurance products and services generally provide simple, affordable coverage of risks for the health and financial security of individuals.

Supplemental health products provide stated benefit payments for certain specified health risks and include personal accident, accidental death, critical illness, hospitalization, travel, dental, dementia, cancer and other specified condition coverages.

We also offer customers term and variable universal life insurance and certain savings products in select markets.

Group Disability and Life

Prior to the sale in 2020, our Group Disability and Life operating segment included our commercial long-term and short-term disability products and our term life group insurance products.

We also offered personal accident insurance and will continue to offer voluntary products and services that were not part of the sale.

Beginning in 2021, voluntary products and services are reported in the Cigna Healthcare segment.

Run-off Businesses

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For more information regarding the arrangements that secure our reinsurance recoverables for the retirement benefits business, see Note 10 to the Consolidated Financial Statements.

DIGITAL, DATA AND TECHNOLOGY

Cigna's investments in digital, data and technology are focused on cultivating robust digital-first capabilities to better engage with customers and stakeholders.

This engagement drives affordability, simplicity, predictability and growth across all of our business platforms.

We deliver value for our clients, customers and other stakeholders by creating better health outcomes, improving customer experience and lowering total cost of care.

Customer-centric, digital-first innovation remains at the forefront of our priorities.

The advancement of our internal capabilities and strategic partnerships continues to produce new and more effective ways to engage with our customers to help close gaps in care, optimize treatment and improve outcomes.

During 2021, our technology continued to deliver cost synergies and differentiated innovation in areas such as pharmacy supply chain, specialty pharmacy and retail networks.

In the future, we expect continued value realization with focus on customer-facing systems and opportunities for enhanced value in specialty, claims and retail.

(See Evernorth Intelligence Solutions section of the " Business - Evernorth " discussion of this Form 10-K for additional information on our intelligent solutions and capabilities).

Data and Analytics.

Our rich, integrated data allows us to provide differentiated outcomes.

We conduct timely, rigorous and objective research and analysis that informs evidence-based medical and pharmacy benefit management and evaluates the clinical, economic and individual impact of enhanced benefit designs and programs.

The combination of our predictive analytics, as well as our machine and deep learning capabilities create actionable intelligence that informs decision-making of our health care professionals.

Our data-driven approach to behavioral health provides personalized and customized care across the entire continuum for the populations we serve.

These solutions predict emerging health needs, close gaps in care and drive cost savings - all while empowering whole-person and whole-family health.

During 2021, we continued to leverage both internal and external data related to COVID-19 to develop vaccination incentive programs, identify and address health disparities and better understand the long-term medical and behavioral complications among the American workforce.

Employers can leverage this data to proactively offer physical and behavioral health support to ease their employees' recovery and return to work.

We continue to bring new technology-enabled products and services to the market, including biometric stress prediction and focused insights in spaces such as women's health and opioid addiction.

Our digital health focus has shown value across the enterprise by creating engaging experiences that give customers the right information at the right time.

This includes an enhanced MyCigna.com experience with new mobile features, including refill and payment options and better access to virtual care through our acquisition of MDLIVE.

Cybersecurity protections, such as multi-factor authentication, have been launched across Cigna's digital offerings providing better peace of mind and a stronger sense of security.

Technology Operations.

Our technology team, powered by approximately 8,000 employees and several thousand external resources working with our partners, supports the various information systems essential to our operations, including the health benefit claims processing systems and specialty and home delivery pharmacy systems.

Uninterrupted point-of-sale electronic retail pharmacy claims processing is a significant operational requirement for our business.

We believe we have substantial capacity for growth in our United States pharmacy claims processing facilities.

Our pharmacy technology platform allows us to safely, rapidly and accurately adjudicate over one billion adjusted prescriptions annually.

Our technology helps retail pharmacies focus on patient care and our real-time safety checks help avoid medication errors.

The Cigna companies hold over 270 United States patents.

We use these patents to protect our proprietary technological advances and to differentiate ourselves in the market.

Exiting Businesses

Our Interest in a Joint Venture in Türkiye

In December 2022, we divested our ownership interest in Cigna Sağlık Hayat ve Emeklilik, our joint venture in Türkiye, to our long-time partner QNB Finansbank.

International Life Accident and Supplemental Benefits

We offered life, accident and supplemental benefits insurance products and services in Hong Kong, Indonesia, New Zealand, South Korea, Taiwan and Thailand until the completion of the sale of these businesses on July 1, 2022 to Chubb as described in the "Overview" section of this Form 10-K.

South Korea represented our single largest geographic market for these businesses.

Group Disability and Life

Our Group Disability and Life operating segment included our commercial long-term and short-term disability products and our term life group insurance products, until completion of the sale in 2020.

We also offered personal accident insurance and will continue to offer voluntary products and services that were not part of the sale.

Beginning in 2021, voluntary products and services are reported in the Cigna Healthcare segment.

INVESTMENT MANAGEMENT

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Separate Accounts

Our subsidiaries or external advisors manage invested assets of Separate Accounts on behalf of contractholders, including the Cigna Pension Plan, variable universal life products sold through our corporate-owned life insurance business and other life insurance products.

Our subsidiaries or external advisors manage invested assets of separate accounts on behalf of contractholders, including The Cigna Group Pension Plan, variable universal life products sold through our corporate-owned life insurance business and other life insurance products.

These assets are legally segregated from our other businesses and are not included in General Account Invested Assets.

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STRATEGIC INVESTMENTS

In addition to the portfolio investments in our general and separate accounts discussed above (see "Investment Management" section) that support our insurance operations, we do targeted investing within the health care industry specifically.

In 2018, Cigna committed $250 million to Cigna Ventures, our strategic corporate venture fund to invest in promising startups and growth-stage companies who, like us, are unlocking new growth possibilities in health care.

Specifically, we invest in companies making groundbreaking progress in three strategic areas:

insights / analytics, digital health / experience and care delivery / enablement.

Cigna Ventures.

In addition to the portfolio investments in our general and separate accounts discussed in the Investment Management section above that support our insurance operations, we make targeted investments within the health care industry, specifically.

In 2022, The Cigna Group committed an additional $450 million to Cigna Ventures, our strategic corporate venture fund, resulting in an aggregate commitment of $700 million to this strategic initiative.

Cigna Ventures invests in promising startups and growth-stage companies who, like us, are unlocking new growth possibilities in health care.

Specifically, we invest in companies

making groundbreaking progress in three strategic areas:

insights and analytics, digital health and experience, and care delivery and enablement.

As of December 31, 2022, Cigna Ventures has seven venture capital partners and 22 existing direct investments.

Through these deep partnerships we collaborate, innovate and develop new solutions that address critical market challenges of affordability, predictability and simplicity impacting the people we serve.

In 2021, Cigna made targeted investments to further drive growth.

We continued to invest in our technology capabilities to produce new and more effective ways to operate, as well as engage with our customers.

We intend to lead with digital engagement by creating connections between points of care and guiding customers to the optimal location and provider.

Our modernized data and technology

ecosystem will empower us to integrate our assets, gather insights and engage with prospects and customers in new ways.

Through these deep partnerships we collaborate, innovate and develop new solutions that address critical challenges of health and vitality impacting the people we serve.

As of December 31, 2022, the Company had a commitment to become a minority owner in VillageMD by investing up to $2.7 billion in VillageMD preferred equity.

In January 2023, we invested $2.5 billion of the $2.7 billion.

VillageMD is an independent primary care group committed to offering high-quality, accessible primary care options for communities across the country through Village Medical.

VillageMD partners with physicians to provide the tools, technology, operations, staffing support and industry relationships to deliver high-quality clinical care and better patient outcomes, while reducing the total cost of care.

VillageMD and Village Medical operate in 22 markets and are responsible for more than 1.6 million patients.

DIGITAL, DATA AND TECHNOLOGY

The Cigna Group's investments in digital, data and technology are focused on cultivating robust digital-first capabilities to better engage with customers and stakeholders.

We deliver value for our clients, customers and other stakeholders by creating better health outcomes, improving customer experience and lowering total cost of care.

Customer-centric, digital-first innovation remains at the forefront of our priorities.

During 2022, technology continued to deliver value for current business while simultaneously focusing on reducing complexity and cost within our technology ecosystem.

In the future, with a simplified technology ecosystem, we expect an increase in optionality, customer engagement, loyalty and speed to market.

(See Evernorth Intelligence Solutions section of the " Business - Evernorth Health Services " discussion of this Form 10-K for additional information on our intelligent solutions and capabilities).

In 2022, The Cigna Group continued to invest in our technology capabilities to produce new and more effective ways to operate, as well as meet customers where they are.

We intend to lead with digital engagement by creating connections between points of care and guiding customers through the best mechanism to the optimal location and provider.

Our modernized data and technology ecosystem will empower us to integrate our assets, gather insights and engage with prospects and customers in new ways.

For the year ended December 31, 2022, our capital expenditures for property, equipment and computer software were $1.3 billion.

Our acquisition of virtual telehealth leader MDLIVE demonstrates how we are responding to the dramatic increase in new models for accessing care and we see virtual care as accelerating improved affordability.

Through MDLIVE, we have expanded access to virtual care services for millions of customers, with capabilities that now include primary and dermatological care, as well as behavioral health for conditions including anxiety and depression, and we plan to continue introducing additional services.

Recently, we developed an approach for patients diagnosed with orthopedic and musculoskeletal conditions to provide highly personalized and actionable information to guide their choices and support improved health outcomes and affordability.

We also launched an innovative virtual-first health plan option for employers, another step forward in providing convenient and comprehensive care experiences for our customers.

See Note 4 to the Consolidated Financial Statements for further information on the MDLIVE acquisition.

In 2021, we committed to invest $550 million in preferred stock of Bright Health Group, Inc.

("Bright Health"), a technology-enabled health insurance carrier.

This investment was completed in January 2022.

We are committed to improving and expanding access to quality, affordable health care and our investment in Bright Health aligns with our vision.

We seek to be partners of choice and look forward to exploring new ways to partner with Bright Health.

Data and Analytics.

Our rich, integrated data allows us to provide differentiated outcomes.

The combination of our predictive analytics, as well as our machine and deep learning capabilities create actionable intelligence that informs decision-making of our health care professionals.

Our data-driven approach to behavioral health provides personalized and customized care across the entire continuum for the populations we serve.

These solutions predict emerging health needs, close gaps in care and drive cost savings - all while empowering whole-person and whole-family health.

During 2022, we continued to leverage both internal and external data to identify and address health disparities and better understand the long-term medical and behavioral complications facing our customers.

The data-informed approach allows for delivery of solutions with a digital-first entry point that meet our customers where they are to offer physical and behavioral health support.

Our digital health focus has shown value across the enterprise by creating engaging experiences that give customers the right information at the right time.

We continue to bring new technology-enabled products and services to the market, expanding on a platform that connects to a given benefit structure in a single personalized environment.

This allows for further capitalization on our unique data.

Cybersecurity protections continue to be a top priority across The Cigna Group's digital offerings.

Technology Operations.

Our technology team, powered by over 8,500 employees and several thousand external resources working with our partners, supports the various information systems essential to our operations, including the health benefit claims processing systems and specialty and home delivery pharmacy systems.

Uninterrupted point-of-sale electronic retail pharmacy claims processing is a significant operational requirement for our business.

We believe we have substantial capacity for growth in our United States pharmacy claims processing facilities.

Our pharmacy technology platform allows us to safely, rapidly and accurately adjudicate over one billion adjusted prescriptions annually.

Our technology helps retail pharmacies focus on patient care and our real-time safety checks help avoid medication errors.

The Cigna Group companies hold over 320 United States patents.

We use these patents to protect our proprietary technological advances and to differentiate ourselves in the market.

HUMAN CAPITAL MANAGEMENT

Cigna's mission is to improve the health, well-being and peace of mind of those we serve by enabling affordable, predictable and simple health care.

The Cigna Group's mission is to improve the health and vitality of those we serve.

A global healthy and diverse workforce is essential to achieving our mission and our business growth strategies.

We are continually investing in our global workforce to support our employees' health and well-being, further drive diversity and inclusion, provide fair and market-competitive pay and foster their growth and development.

As of the end of 2022, we had approximately 71,300 employees, with 94% of our employees based in the United States.

Almost all of our employees are full-time, with less than 2% of employees regularly working fewer than 30 hours per week.

Approximately 97% of our employees are full-time.

Health, Well-Being and Other Benefits

Tending to our employees' health, well-being and peace of mind is more than just our mission – it is a critical business imperative for our company.

At Cigna, we believe that the provision of health and well-being benefits for our employees is our responsibility as an employer and should not be outsourced to the government or other third parties.

Ensuring that our employees have comprehensive health and well-being benefits is not only the right thing to do from a societal perspective – it is also one of the most important investments in our enterprise that we make each year.

That is because we strongly believe that a healthy workforce is more productive, has fewer absences and is a critical enabler for us to drive our business and our strategy forward, thereby creating significant shareholder value.

In 2021, Cigna invested approximately 19% of total payroll in health, well-being and other benefits, including life and disability programs, 401(k) contributions and retirement-related benefits for its employees in the United States, which represents an increase from prior year attributed to medical spend and COVID-related benefits offered to employees.

In addition to traditional medical and pharmacy benefits, we provide mental health support to employees, including:

employee assistance program (EAP) benefits that are free to all employees and to any member of their household, digital tools that provide access to education and therapy to help individuals build greater resilience and cope with stress, anxiety and depression.

Tending to our employees' health and vitality is a critical business imperative for our company and one of the most important investments in our enterprise that we make each year.

We believe that when we support our employees' health and well-being, they have fewer absences and are more productive and engaged in driving our mission and business strategy forward, thereby creating shareholder value.

In 2022, The Cigna Group invested approximately 18% of total payroll in health, well-being and other benefits, including life and disability programs, 401(k) contributions and retirement-related benefits for our employees in the United States.

In addition to traditional medical and pharmacy benefits, we provide both physical and mental health support to employees, including:

nutrition and fitness programs, employee assistance program (EAP) benefits that are free to all employees and to all members of their household, and digital tools that provide access to education and therapy to help individuals build greater resilience and cope with stress, anxiety and depression.

Diversity, Equity & Inclusion

At Cigna, we take an expansive view of diversity including race, ethnicity, nationality, gender, veteran status, ability, sexual orientation and gender identity.

As of the end of 2021, 70% of our employees were women, and 26% of our employees in the United States were from underrepresented groups (which includes Black/African American, Hispanic or Latinx, Pacific Islander and American Indian/Alaskan employees).

At The Cigna Group, we take an expansive view of diversity including race, ethnicity, nationality, gender, veteran status, disability, sexual orientation and gender identity.

As of the end of 2022, based on employee self-reporting, 71% of our employees were women, and 39% of our employees in the United States were ethnic minorities (which includes Black / African American, Asian, Hispanic or Latinx, Pacific Islander and American Indian / Alaskan employees).

We are committed to attracting and recruiting key diverse talent into various leadership development programs and other entry level positions across the business.

This success is rooted in strategic relationships with diverse student groups at our partner colleges and universities, as well as our commitment to multiple national, regional and local organizations, which provide us focused recruiting opportunities with women, the LGBTQ+ community, military veterans and underrepresented minority groups.

Our compensation practices, rooted in our pay-for-performance philosophy, promote equity in pay through measures such as benchmarking compensation by role, eliminating inquiries regarding applicants' compensation history from the hiring process and monitoring for potential disparities.

Our most recent pay equity analysis, conducted in 2022, showed that in the United States, female employees at Cigna earn more than 99 cents for every dollar earned by similarly-situated male employees, and employees from underrepresented groups (as defined above) earn more than 99 cents for every dollar earned by similarly-situated white employees.

We are committed to attracting and recruiting key diverse talent across various leadership development programs and other entry level positions with the business.

This success is rooted in strategic relationships with diverse student groups at our partner colleges and universities, as well as our commitment to multiple national, regional and local organizations, which provide us focused recruiting opportunities with women, the LGBTQA+ community, military veterans and underrepresented minority groups.

Our most recent pay equity analysis among our U.S.

employees, conducted in 2023, illustrated that female employees of The Cigna Group earn more than 99 cents for every dollar earned by similarly-situated male employees, and employees from underrepresented groups (which includes Black/African American, Hispanic or Latinx, Pacific Islander and American Indian/Alaskan employees) earn more than 99 cents for every dollar earned by similarly-situated white employees.

This year, for the first time, we also analyzed gender pay on a global basis and found that across the entire Company female employees at The Cigna Group earn more than 99 cents for every dollar earned by similarly-situated male employees.

Talent Acquisition, Development and Retention

Our talent acquisition and rewards strategies are designed to ensure we attract and retain skilled employees who are engaged in our mission.

Our talent acquisition and rewards strategies are designed to attract and retain skilled employees who are engaged in our mission.

Our compensation program is rooted in market competitive base salaries and incentives that reward contributions that advance the Company's strategy and mission.

The COVID-19 pandemic has continued to impact our employee population, including increased worker attrition throughout the last year, which has affected many companies in what the media has dubbed the "great resignation." In 2021, the voluntary turnover rate was 8% for exempt employees in the United States.

Shifts in labor dynamics that started in the midst of the COVID-19 pandemic have continued to impact our employee population.

As we have adapted to new ways of working post-pandemic, where possible, employees work with their leaders to determine whether they work onsite, work at home, or leverage a hybrid option.

The level of worker attrition continues to be above our pre-pandemic levels as well:

in 2022, the voluntary turnover rate was 16% for all employees.

In previous 10-K filings, we reported the voluntary turnover rate only for exempt employees in the United States.

Our online learning platform and career development tools and events offer a broad range of training, education and development resources to all employees.

In 2021, U.S.

In 2022, based on internal data, U.S.

employees on average engaged in 34 hours of learning through these resources.

Enterprise leadership development programs were provided to executive, high-potential and new manager audiences to develop and expand leadership capability across the enterprise.

Cigna also offers an education reimbursement program for both full and part-time employees who meet the continuing education criteria.

The Cigna Group also offers an education reimbursement program for both full and part-time employees who meet the continuing education criteria.

We believe these strategies and programs contribute to employee engagement and retention.

ENVIRONMENTAL, SOCIAL AND GOVERNANCE

The Cigna Group's environmental, social and governance ("ESG") framework is structured around four pillars that underscore our mission to improve the health and vitality of those we serve.

We drive action through this framework to deliver on our ESG vision:

to transform the ecosystem of health into one that is well-functioning, sustainable, accessible and equitable - advancing better health for all.

Our commitment to this vision guides us in our multidimensional value-creation strategy as we strive to meet the needs of our many stakeholders.

The four pillars of our ESG framework are:

Healthy Environment

We believe that responsible environmental stewardship can improve health and well-being and also makes sound business sense.

We strive to identify new efficiencies and make strategic investments to drive progress on our operational sustainability targets.

We aim to reduce our environmental impacts and our operating costs, but our commitments are not material to our results of operations, financial condition or liquidity.

Healthy Society

We work to advance better health for all.

Building a well-functioning, sustainable, accessible and equitable health care system involves understanding and addressing social determinants of health, advancing health equity and improving medical quality and access while prioritizing affordability, lowering health risks, promoting preventive health interventions and coordinating all aspects of care.

We drive progress in each of these areas by aligning our products and services with value-based care models, leveraging integrated benefits, managing drug costs through innovation, expanding digital offerings, and reviewing coverage policies for health equity.

We also help to eliminate barriers to care and address other factors that contribute to health disparities.

Healthy Workforce

We believe that employers play a vital role in the health care system, and we strive to be a model for others by prioritizing the health and well-being of employees within our own company.

We are advancing our diversity, equity and inclusion commitments, including by setting aspirational goals to increase gender equality in our leadership pipeline.

We are continuing to evolve our employee programs to meet the dynamic working environment and supporting our employees in their career growth as they support the growth of our business.

See further discussion of this pillar within Part I, Item 1 "Human Capital Management" section above.

Healthy Company

We strive to promote positive societal impact, ethical behavior and responsible and resilient business practices across our multidimensional enterprise.

This includes adhering to strong board governance practices, protecting the sensitive data of our clients and customers by ensuring cybersecurity incident response preparedness, as well as supporting a responsible supply chain and committing to increasing our annual diverse supplier spend.

MISCELLANEOUS

• Revenues from U.S.

Federal Government agencies, under a number of contracts, represent 14% of our consolidated revenues in 2021 and 15% in 2020.

• The Company is not dependent on business from one or a few brokers or agents.

Federal Government agencies, under a number of contracts, represented 14% of our consolidated revenues in 2022 and 2021 and 15% in 2020.

• The Company does not rely on business from one or a few brokers or agents.

The laws and regulations governing our business continue to increase each year and are subject to frequent change.

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As has become increasingly common with public policy reforms in the health services industry, executive, judicial or legislative intervention could alter, slow or eliminate the impact of any proposal following the related regulation's promulgation.

Many aspects of our business are directly regulated by federal and state laws and administrative agencies, such as the Department of Health and Human Services ("HHS"), Centers for Medicare and Medicaid Services ("CMS"), the Internal Revenue Service ("IRS"), the U.S.

Departments of Labor ("DOL") and Treasury, the Office of Personnel Management ("OPM"), the Federal Trade Commission ("FTC"), the U.S.

Securities and Exchange Commission ("SEC"), the Office of the National Coordinator for Health Information Technology ("ONC"), state departments of insurance and state boards of pharmacy.

Many aspects of our business are directly regulated by federal and state laws and administrative agencies, such as HHS, CMS, the Internal Revenue Service ("IRS"), the U.S.

Departments of Labor ("DOL") and Treasury, the Office of Personnel Management ("OPM"), the Federal Trade Commission ("FTC"), the SEC, the Office of the National Coordinator for Health Information Technology ("ONC"), state departments of insurance and state boards of pharmacy.

Our business practices may also be shaped by enforcement actions of federal agencies, such as the Department of Justice ("DOJ"), state agencies, as well as judicial decisions.

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Congress to provide information, including testifying before Congressional committees and subcommittees, regarding certain of our business practices.

If Cigna is determined to have failed to comply with applicable laws or regulations, these examinations, audits, investigations, reviews, subpoenas and demands may:

If The Cigna Group is determined to have failed to comply with applicable laws or regulations, these examinations, audits, investigations, reviews, subpoenas and demands may:

• result in fines, penalties, injunctions, consent orders or loss of licensure;

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These regulatory actions primarily provide for:

• client and customer premium relief to avoid the cancellation or non-renewal of policies;

• mandating or requesting waiver of customer cost-sharing and other related costs such as COVID-19 testing or treatment, as well as establishing provider reimbursement and vaccine immunizations coverage requirements;

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• clarification regarding permissible sharing of information and coordination among health care providers;

• revising or suspending the use of certain medical management procedures;

• mandating prescription drug benefit administration requirements primarily related to formulary exceptions and restrictions, and prior authorization and prescription drug refill limits;

• requiring vaccinations for certain employee populations.

These actions are in effect for various durations, but generally track the different states of emergency that have been declared at the state and federal levels.

Of particular significance is the Public Health Emergency declared by the Secretary of HHS on January 31, 2020, which sets the effective period for certain of the requirements established through federal COVID-19 legislation, such as covering testing without cost sharing.

Of particular significance is the Public Health Emergency ("PHE") declared by the Secretary of HHS on January 31, 2020, which has since been extended and sets the effective period for certain of the requirements established through federal COVID-19 legislation, such as covering testing without cost sharing.

On January 30, 2023, the Biden administration announced that it plans to end the PHE and Federal National Emergency on May 11, 2023.

With the PHE coming to an end, states will be required to resume Medicaid redeterminations for the first time since the PHE began.

These redeterminations will take place on a staggered basis, but it is anticipated that the remediations will find many beneficiaries are no longer eligible for Medicaid.

As a result, it is expected that beneficiaries determined to be ineligible for Medicaid may seek alternate coverage in the individual marketplace.

Patient Protection and the Affordable Care Act

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Our business model is impacted by the ACA, including our relationships with current and future producers and health care providers, products, service providers and technologies.

The provisions of the ACA imposed, among other things, certain assessments on health insurers, created health insurance exchanges for individuals and small group employers to purchase insurance coverage and implemented minimum medical loss ratios ("MLRs") for our Medicare and commercial businesses.

Certain states have adopted MLR requirements applicable to our commercial businesses that are more stringent than those established by the ACA.

dollar amount of essential health benefits, increasing restrictions on rescinding coverage, extending coverage of dependents up to age 26, restrictions on differential pricing, enforcement mechanisms and rules related to health care fraud and abuse enforcement activities and certain pharmacy benefit transparency requirements.

Other provisions of the ACA in effect include reduced Medicare Advantage payment rates, the requirement to cover preventive services with no enrollee cost-sharing, banning the use of lifetime and annual limits on the dollar amount of essential health benefits, increasing restrictions on rescinding coverage, extending coverage of dependents up to age 26, restrictions on differential pricing, enforcement mechanisms and rules related to health care fraud and abuse enforcement activities and certain pharmacy benefit transparency requirements.

The employer mandate requires employers with 50 or more full-time employees to offer affordable health insurance that provides minimum value (each as defined under the ACA) to full-time employees and their dependents, including children up to age 26, or be subject to penalties based on employer size.

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In 2021, in response to the COVID-19 pandemic, the federal government temporarily expanded eligibility for ACA subsidies to higher-income people who did not otherwise qualify, increased ACA subsidies for lower-income people who already qualify for 2021 and 2022, provided subsidies for individuals who receive unemployment benefits in 2021 and prevented taxpayers who misestimated their income in 2020 from having to repay excess premium tax credits.

These subsidies may be extended further through proposed legislation.

The Inflation Reduction Act, which was signed into law in August 2022, extended the expanded and increased premium tax credits for individuals enrolled in ACA qualified health plans, through December 31, 2025.

Medicare and Medicaid Regulations

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For example, beginning with Star Ratings for payment year 2024, CMS will place more emphasis on patient experience survey-based measures which could reduce Star Ratings predictability year over year.

Additionally, as a result of the COVID-19 pandemic's impact on 2020 care patterns and utilization, CMS finalized rules applying relief to Medicare Advantage and Part D Plan Star Ratings for payment year 2023 by utilizing the higher of the payment year 2023 or 2022 measure level Star Ratings.

CMS uses a risk-adjustment model that adjusts premiums paid to Medicare Advantage plans according to customers' health status.

The risk-adjustment model generally pays more where a plan's membership is expected to have increased costs because of the health status of its members.

Additionally, as a result of the COVID-19 pandemic's impact on 2020 care patterns and utilization, CMS finalized rules applying relief to Medicare Advantage

and Part D Plan Star Ratings for payment year 2023 by utilizing the higher of the payment year 2023 or 2022 measure level Star Ratings.

The 2023 Star Ratings will only include adjustments as a result of the COVID-19 pandemic's impact for three Healthcare Effectiveness Data and Information Set measures, and we expect this change will result in a decrease in our Star Ratings for payment year 2024.

CMS provides risk-adjusted premium payments for Medicare Advantage plans based on our customer demographics and medical diagnoses, which may change from period to period based on the underlying health of our customers.

Under this model, rates paid to Medicare Advantage plans are based on actuarially determined bids, which include a process whereby our prospective payments are based on our estimated cost of providing standard Medicare-covered benefits to an enrollee with a "national average risk profile." That baseline payment amount is adjusted to reflect the health status of our enrolled membership.

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The CMS risk-adjustment model uses the diagnosis data to calculate the risk-adjusted premium payment to the plans.

These adjustments are generally settled semi-annually with CMS.

The final adjustment is generally settled with CMS in the year following the contract year.

CMS may conduct audits to validate risk-adjustment data submitted by health plans.

In 2012, CMS released a payment methodology that provided for sample audit error rates to be extrapolated to the entire Medicare Advantage contract after comparing audit results with a similar audit of Medicare Fee for Service (the "FFS Adjuster") and applying an FFS Adjuster to establish actuarial equivalency in payment rates as required by the Medicare statute.

However, a methodology to calculate the FFS Adjuster was not finalized and CMS has, to date, not completed any Risk Adjustment Data Validation ("RADV") audits using extrapolation.

On November 1, 2018, CMS released a proposed rule titled "Proposed Rule on Changes to MA and Part D Programs for CY 2020 and 2021" that would revise its RADV methodology for RADV audits of contract year 2011 and all subsequent years by, among other things, extrapolating the error rate related to RADV audit findings without applying the FFS Adjuster.

If the proposed rule is adopted in its current form, it could result in some combination of degraded plan benefits, higher monthly premiums and reduced choice for the population served by all MA insurers.

The Company, along with other Medicare Advantage organizations and additional interested parties, submitted comments to CMS on the proposed rule as part of the notice-and-comment rulemaking process.

The comment period concluded on August 28, 2019 and CMS issued guidance on October 20, 2021 extending the timeline to finalize the proposed rule until November 2022.

On January 30, 2023, CMS issued the Final Rule titled "Medicare and Medicaid Programs;

Policy and Technical Changes to the Medicare Advantage, Medicare Prescription Drug Benefit, Program for All-inclusive Care for the Elderly (PACE), Medicaid Fee-For-Service, and Medicaid Managed Care Programs for Years 2020 and 2021", effective April 3, 2023.

The Final Rule addresses CMS's audit methodology and related policies for the Risk Adjustment Data Validation ("RADV").

Although CMS did not specify their sampling or extrapolation methodology the rule did codify that CMS will use a statistically valid method for sampling and extrapolation of error rates and the decision not to apply a fee for service adjuster when determining RADV audit findings.

CMS will not apply extrapolation to RADV audits until the 2018 payment year with payment recoveries for those RADV audits expected in 2025.

Audits for payment years prior to 2018 are not subject to extrapolation.

RADV audits for our contract years 2011 through 2015 are currently in process.

It is uncertain whether CMS will finalize the rule as proposed.

See below under "Federal and State Oversight of Government-Sponsored Health Care Programs" for a discussion of RADV audits.

The Company is not currently subject to RADV audits for the 2018 and subsequent payment years.

Coverage of prescription drugs under Medicare Part D is also regulated by CMS and our contracts with CMS contain provisions for risk sharing and certain payments for prescription drug costs for which we are not at risk.

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We expect CMS, HHS-OIG, DOJ and other federal agencies to continue to closely scrutinize each component of the Medicare Advantage program and modify the terms and requirements of the program through rulemaking or enforcement activities.

The Company continues to believe that further regulation or changes to existing regulations could result in disruption in the marketplace including the potential for some combination of degraded plan benefits and higher monthly premiums.

Noncompliance with these laws and regulations may result in significant consequences, including fines and penalties, enrollment sanctions, exclusion from the Medicare and Medicaid programs, limitations on expansion and criminal penalties.

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Criminal statutes similar to the False Claims Act provide that if a corporation is convicted of presenting a claim or making a statement it knows to be false, fictitious or fraudulent to any federal agency, the corporation may be fined.

Conviction under these statutes may also result in exclusion from participation in federal and state health care programs.

Conviction under these

statutes may also result in exclusion from participation in federal and state health care programs.

Many states have also enacted laws similar to the False Claims Act, some of which may include criminal penalties, substantial fines and treble damages.

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Other anti-kickback and referral laws may also be applicable including criminal and civil laws restricting illegal kickbacks and conflicts of interest in connection with plans governed by the Employee Retirement Income Security Act of 1974, as amended ("ERISA"), the federal "Stark Law," and various state anti-kickback restrictions.

In November 2020, HHS and HHS-OIG released a final rule that eliminates an anti-kickback regulatory safe harbor protection for price concessions, including rebates, that are offered by pharmaceutical manufacturers to plan sponsors or pharmacy benefit managers

under the Medicare Part D program.

The final rule creates two new safe harbors:

(i) for price reductions by manufacturers to plan sponsors under Medicare Part D and Medicaid managed care organizations that are reflected at the time of dispense and (ii) for fixed-fee service arrangements between manufacturers and pharmacy benefit managers.

The effective date of the final rule has been postponed to January 2026.

A full repeal of the final rule is included in pending legislation.

The effective date of the final rule has been postponed to 2032.

Federal Civil Monetary Penalties Law.

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Risks include potential fines and penalties, restrictions on our ability to participate or expand our presence in certain programs and restrictions on marketing our plans.

For example, with respect to our Medicare Advantage business, CMS and the HHS-OIG perform audits to determine a health plan's compliance with federal regulations and contractual obligations, including program audits and Risk Adjustment Data Validation Audits, which focus on compliance with proper coding practices.

For example, with respect to our Medicare Advantage business, CMS and the HHS-OIG perform audits to determine a health plan's compliance with federal regulations and contractual obligations, including program audits and RADV audits, which focus on compliance with proper coding practices.

Certain of our contracts are currently subject to audits by CMS and the HHS-OIG, including RADV audits.

CMS has announced that its goal is to subject all Medicare Advantage contracts to either a comprehensive or a targeted RADV audit for each contract year.

The DOJ is also currently conducting industry-wide investigations of the risk adjustment data submission practices and business processes of Cigna and a number of other Medicare Advantage organizations.

The DOJ is also currently conducting industry-wide investigations of the risk adjustment data submission practices and business processes of The Cigna Group and a number of other Medicare Advantage organizations.

See Note 23 to the Consolidated Financial Statements for more information.

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We have a contract with the U.S.

Department of Defense ("DoD"), which subjects us to applicable Federal Acquisition Regulations ("FAR") and the DoD FAR Supplement, which govern federal government contracts.

DoD, which subjects us to applicable Federal Acquisition Regulations ("FAR") and the DoD FAR Supplement, which govern federal government contracts.

Further, there are other federal and state laws applicable to our DoD arrangement and our arrangements with other clients that may be subject to government procurement regulations.

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ERISA is a complex set of federal laws and regulations enforced by the IRS and the DOL, as well as the courts.

ERISA regulates certain aspects of the relationship between us, the employers that maintain employee welfare benefit plans subject to ERISA and the participants in such plans.

ERISA regulates certain aspects of the relationship between us, the employers that maintain employee welfare benefit plans subject to ERISA and the

participants in such plans.

Certain of our domestic subsidiaries are also subject to requirements imposed by ERISA affecting claim payment and appeals procedures for individual health insurance and insured and self-insured group health plans and for the insured plans we administer.

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However, there can be no assurances that the DOL may not assert that pharmacy benefit managers are fiduciaries.

From time to time, states have considered legislation to declare a pharmacy benefit manager or health benefit manager a fiduciary with respect to its clients.

From time to time, states have considered, and in limited cases, enacted legislation to declare a pharmacy benefit manager or health benefit manager a fiduciary with respect to its clients.

Plans subject to ERISA may also be subject to state laws and the legal question of whether and to what extent ERISA preempts a state law is likely to continue to be a subject for interpretation by the courts for years to come.

Privacy, Security and Data Standards Regulations

Many of our activities involve the receipt or use of confidential health and other personal information.

In addition, we use aggregated and de-identified data for our own research and analysis purposes and, in some cases, provide access to such de-identified data, or analytics created from such data, to pharmaceutical manufacturers and third-party data aggregators.

We may also use such information

to create analytic models designed to predict, and potentially improve, outcomes and patient care.

There are also industry standards for handling credit card data known as the Payment Card Industry Data Security Standard, which are a set of requirements designed to help ensure that entities that process, store or transmit credit card information maintain a secure environment.

Certain states have incorporated these requirements into state laws or enacted other requirements for using and disclosing personal information.

Additionally, over the past several years, various broad privacy laws have been introduced into one or both chambers of Congress, however, to date, none have been enacted.

The federal Health Insurance Portability and Accountability Act of 1996 and its implementing regulations ("HIPAA") impose minimum standards on health insurers, pharmacy benefit managers, HMOs, health plans, health care providers and clearinghouses for the privacy and security of protected health information.

HIPAA regulations may also hold us liable for violations by our business associates (e.g., entities that provide services to health plans and providers).

HIPAA also established rules that standardize the format and content of certain electronic transactions, including, but not limited to, eligibility and claims.

To the extent insurers offer plans through a public exchange, participants and their downstream entities such as pharmacy benefit managers must adhere to privacy and security standards for personally identifiable information and to impose standards that are at least as protective as those the exchange has implemented for itself.

These standards may differ from, and be more stringent than, HIPAA.

The Health Information Technology for Economic and Clinical Health Act ("HITECH") imposes additional contracting requirements for covered entities, the extension of privacy and security provisions to business associates, the requirement to provide notification to various parties in the event of a data breach of protected health information and enhanced financial penalties for HIPAA violations, including potential criminal penalties for individuals.

In the conduct of our business, depending on the circumstances, we may act as either a covered entity or a business associate.

Numerous federal, state and foreign laws and regulations govern the creation, collection, dissemination, receipt, maintenance, protection, use, transmission, disclosure, privacy, confidentiality, security, availability, integrity, processing, and disposal (collectively "Processing") of protected health information ("PHI") and other personally identifiable information ("PII").

Many of our activities involve Processing of PHI and PII.

We may also use such information to create analytic models designed to predict, and potentially improve, outcomes and patient care.

We are also subject to the Payment Card Industry Data Security Standard, a set of requirements designed to help ensure that entities that Process credit card information maintain a secure environment.

On the federal level we are subject to a number of sector specific regulation.

The federal Health Insurance Portability and Accountability Act of 1996, the Health Information Technology for Economic and Clinical Health Act, the 21st Century Cures Act, Public Law 116-321, and the regulations that implement these laws (collectively "HIPAA") impose requirements on covered entities and business associates that address the privacy and security of PHI.

In the conduct of our business we may be either a covered entity or business associate, and we may also be held liable under HIPAA for violations by our vendors that are business associates.

HIPAA imposes contracting requirements, requires breach notifications, and establishes rules that standardize the format and content of certain electronic transactions, including eligibility and claims.

Violations of HIPAA may result in enforcement actions, civil and criminal penalties and settlement, resolution, and monitoring agreements.

Further, state attorneys general may bring civil actions seeking either injunctions or damages in response to violations of HIPAA that threaten the privacy of state residents and may negotiate settlements for related cases on behalf of their respective residents.

There can be no assurance that we will not be the subject of an investigation, audit or compliance review regarding our compliance with HIPAA.

While HIPAA does not create a private right of action, its standards have been used as a basis for the duty of care in state civil suits, such as those for negligence or recklessness in the handling, misuse or breach of PHI.

HIPAA does not preempt more stringent state health privacy laws and regulations, which may protect the health information of certain individuals, such as minors, and certain types of sensitive health information, such as transgender care, HIV/AIDS status, reproductive health information, genetic information, and mental and behavioral health.

The federal government has also enacted final regulations on interoperability and information blocking to support the seamless and secure access, exchange and use of electronic health information by and between patients, enrollees and entities such as payors and health care providers.

These regulations apply to a variety of entities , including health plans, and generally require significant enhancements to information technology and data governance practices.

The regulations impact how industry participants, including us, comply with disclosure requirements and share information with individuals and other health care organizations.

The federal Gramm-Leach-Bliley Act ("GLBA") and its implementing regulations generally place restrictions on the disclosure of nonpublic information to nonaffiliated third parties, and requires financial institutions, including insurers, to provide customers with notice regarding how their nonpublic personal information is used, including an opportunity to "opt out" of certain disclosures.

State departments of insurance and certain federal agencies adopted implementing regulations as required by federal law.

State and local authorities are increasingly focused on protecting individuals from identity theft and a number of states have adopted comprehensive data security laws and regulations requiring, among other things, certain minimum data security standards and security breach notifications that may apply to us in certain circumstances, as well as certain limitations on access to and use of personal information.

Neither HIPAA nor the GLBA privacy regulations preempt more stringent state laws and regulations which may differ in approach and enforcement.

States have, in recent years, begun to adopt their own omnibus, industry-neutral privacy statutes.

To date, three states have passed such laws:

California, which originally went into effect in 2020 and has been subsequently amended to strengthen consumer rights;

as well as Colorado and Virginia, both effective in 2023.

Generally, these statutes are not applicable to data regulated by GLBA and HIPAA but are, in varying respects, applicable to other data we collect, such as personal data provided by website visitors, employees and business partners.

We anticipate federal and state legislators and regulators to continue to enact legislation related to privacy and cybersecurity, including with respect to ransomware incidents.

Under Section 5 of the Federal Trade Commission Act ("FTC Act"), the FTC has jurisdiction over certain privacy and security practices.

Section 5 of the FTC Act bars unfair and deceptive acts and practices in or affecting commerce and the FTC has charged companies with violating this act based on failures to appropriately and transparently safeguard personal information and respect consumers' privacy rights.

In 2023, significant changes to GLBA's "Safeguards Rule" will go into effect, substantially raising the GLBA standards for security.

Additionally, under Section 5 of the Federal Trade Commission Act ("FTC Act"), the FTC has jurisdiction over certain privacy and security practices deemed unfair and deceptive acts and practices in or affecting commerce.

The FTC has charged companies with violating this act based on failures to appropriately and transparently safeguard personal information, respect consumers' privacy rights, based on disclosures of health and personal information to third parties, the failure to limit third-party use of health information, the failure to implement policies and procedures to prevent the improper or unauthorized disclosure of health information, and the failure to provide notice and obtain consent before the use and disclosure of health information for advertising.

In addition to the FTC Act, the FTC also enforces other federal laws relating to consumers' privacy and security.

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State legislatures and regulators are similarly interested in the use of AI, particularly as it is used in modeling, and a handful of states have either passed legislation or issued regulatory guidance concerning AI.

Additionally, the National Association of Insurance Commissioners ("NAIC"), an organization of state insurance regulators, recently established the Innovation, Cybersecurity and Technology Committee to provide a forum for regulators to learn, monitor and confer on emerging technology issues, including, among others, cybersecurity and AI.

The Cybersecurity Information Sharing Act of 2015 ("CISA") encourages organizations to share cyber threat indicators with the federal government and, among other things, directs HHS to develop a set of voluntary cybersecurity best practices for organizations in the health care industry.

Additionally,

the National Association of Insurance Commissioners ("NAIC"), an organization of state insurance regulators, recently established the Innovation, Cybersecurity and Technology Committee to provide a forum for regulators to learn, monitor and confer on emerging technology issues, including, among others, cybersecurity and AI.

State Departments of Insurance ("DOI") and other state government agencies and legislatures are increasingly aware and active in providing guidance in the AI space.

The SEC has proposed additional cybersecurity disclosure obligations on reporting companies, with final rulemaking expected in 2023.

The Cybersecurity Information Sharing Act of 2015 ("CISA") encouraged organizations to share cyber threat indicators with the federal government and, among other things, directed HHS to develop a set of voluntary cybersecurity best practices for organizations in the health care industry.

States have also begun to issue regulations specifically related to cybersecurity, which may differ or conflict from state to state.

In October 2017, the NAIC adopted the Insurance Data Security Model Law that creates rules for insurers and other covered entities addressing data security, investigation and notification of breaches.

This includes maintaining an information security program based on ongoing risk assessment, overseeing third-party service providers, investigating data breaches

and notifying regulators of a cybersecurity event.

This includes maintaining an information security program based on ongoing risk assessment, overseeing third-party service providers, investigating data breaches and notifying regulators of a cybersecurity event.

As the model law is intended to serve as model legislation only, states will need to enact legislation for the model law to become mandatory and enforceable.

To date, eleven states have enacted some form of the model law.

HHS, including the ONC, the Office for Civil Rights and CMS, has enacted regulations, and proposed additional regulations, to support the seamless and secure access, exchange and use of electronic health information by or between patients, enrollees and entities such as payers and health care providers, which is generally termed "interoperability." These regulations include, among others, proposed changes to HIPAA designed to promote greater patient access and control over health information maintained by health plans and health care providers and improve information sharing for case management and care coordination.

Other interoperability regulations prohibit information blocking by certain entities and require certain regulated plans to make specified patient, clinical and plan-related data available to enrollees via interoperable technology and applications.

These regulations apply to a variety of entities, including health plans like Medicare plans and qualified health plans, as well as health care providers, certified health information technology developers and health information networks and exchanges and generally require significant enhancements to information technology and data governance practices.

The regulations and proposals demonstrate an increased interest in information sharing and will impact how industry participants, including us, comply with disclosure requirements and share information with individuals and other healthcare organizations.

We continue to monitor developments and to submit comments on proposed regulations where appropriate.

In addition, international laws, rules and regulations governing the use and disclosure of personal information can be more stringent than those in the United States, and they vary from jurisdiction to jurisdiction.

The European Union's General Data Protection Regulation ("GDPR"), which became effective May 2018, enhanced or created obligations regarding the handling of personal data relating to European residents (such as regarding notices, data protection impact assessments and individual rights) and provides for greater penalties for noncompliance than the previous European Directive or laws.

To date, twenty-one states have enacted some form of the model law.

Over the past several years, the federal government has increasingly focused on the cybersecurity requirements applicable to government contractors, including enhanced guidance and regulation.

These include compliance with the Privacy Act of 1974, the Defense Federal Acquisition Regulation Supplement ("DFARS") cybersecurity requirements, the Cybersecurity Maturity Model Certification ("CMMC") (going into effect over the next four years and based on NIST standards), the Federal Information Security Modernization Act ("FISMA"), and the White House's 2021 Executive Order on Improving the Nation's Cybersecurity.

Some local authorities are increasing focused on protecting individuals from identity theft and a number of states have adopted comprehensive data security laws and regulations requiring, among other things, certain minimum data security standards and security breach notifications that may apply to us in certain circumstances, as well as certain limitations on access to and use of PII.

These laws and regulations include state general data breach laws, which exist in all fifty states and protect PII generally, as well as DOI cybersecurity laws, applicable to various DOI licensees, such as insurers, PBMs and TPAs.

Many states also have their own sector-specific laws regarding the Processing of PII which may apply to us as well.

In the past few years, five states have adopted their own comprehensive consumer privacy statutes and many more states are considering doing so.

Generally, the statutes exempt data and/or entities regulated by GLBA and/or HIPAA but are, in varying respects, applicable to other data we collect, such as PII provided by website visitors, and in California, employees and business partners.

Additionally, we anticipate federal and state legislators and regulators will continue to enact legislation related to privacy and cybersecurity, including with respect to ransomware incidents.

In addition, international laws, rules and regulations governing the use and disclosure of PII can be more stringent than those in the United States, and they vary from jurisdiction to jurisdiction.

The European Union's General Data Protection Regulation ("GDPR"), which became effective May 2018, enhanced or created obligations regarding the handling of PII relating to European residents (such as regarding notices, data protection impact assessments and individual rights) and provides for greater penalties for noncompliance than the previous European Directive or laws.

In addition, many countries outside of Europe where we conduct business have implemented or may implement data protection laws and regulations, some of which include requirements modeled after those in the GDPR.

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State and federal policymakers have taken actions intended to increase transparency and predictability of health care costs for consumers.

For example, in October 2020, the HHS, the DOL and the Department of the Treasury issued a final rule that requires most group health plans and health insurance issuers in the individual and group markets to disclose price and cost-sharing information for all items and services to participants and enrollees.

The cost-sharing information requirements under the rule take effect in a phased approach beginning January 1, 2023.

In addition to providing personalized cost-sharing information, beginning January 1, 2022, health plans and health insurers must also publicly disclose (i) in-network provider negotiated rates, (ii) historical out-of-network allowed amounts and billed charges and (iii) in-network negotiated rates and historical net prices for all covered prescription drugs.

Beginning in 2021, insurers will be able to receive credit in their MLR calculations for certain savings they share with enrollees.

In August 2021, the departments jointly released guidance regarding the implementation of the rule.

Importantly, the guidance announced that the agencies will (i) indefinitely defer enforcement of the rule's requirement that plans and issuers publish machine-readable files relating to prescription drug pricing pending further rulemaking and (ii) defer enforcement of the rule's requirement to publish the remaining machine-readable files until July 1, 2022.

Congress also passed the Consolidated Appropriations Act, 2021 ("CAA"), which included a number of transparency requirements on plans and issuers that are duplicative or overlap with the October 2020 rule issued by the departments.

The indefinite enforcement deferral of the prescription drug pricing file under the October 2020 rule is, in part, due to the subsequent enactment of the CAA, which requires plans to report information regarding prescription drug spending to federal regulators beginning in 2022.

As part of the aforementioned CAA, Congress passed the No Surprises Act, which prohibits health care providers, in certain situations, from balance billing the patient and requires that they work directly with insurers to agree on out-of-network reimbursement, including utilizing an independent dispute resolution process outlined in the act.

The act is effective January 1, 2022.

For example, the Transparency in Coverage rule issued in October 2020 by the HHS, the DOL and the Department of the Treasury now requires most group health plans and health insurance issuers in the individual and group markets to publicly disclose

price and cost-sharing information for all items and services to participants and enrollees.

Health plans and health insurers must publicly disclose (i) in-network provider negotiated rates, and (ii) historical out-of-network allowed amounts and billed charges.

The rule also required public disclosure of in-network negotiated rates and historical net prices for all covered prescription drugs, but the departments announced in August 2021 guidance that they will indefinitely defer enforcement of the rule's requirement that plans and issuers publish machine-readable files relating to prescription drug pricing pending further rulemaking.

Beginning in 2023, we will be required to make available to members personalized cost-sharing information for 500 covered health care items and services.

In 2024, this cost-sharing information requirement will expand to all items and services, including prescription drugs.

Insurers offering group or individual health insurance coverage may receive credit in their MLR calculations for certain savings they share with enrollees that result from the enrollees shopping for, and receiving care from, lower-cost, higher-value providers.

The indefinite enforcement deferral of the prescription drug pricing file under the Transparency in Coverage rule is, in part, due to the subsequent enactment of the CAA, which requires plans to report information regarding prescription drug spending to federal regulators beginning in 2022.

The CAA also included the No Surprises Act, which prohibits health care providers, in certain situations, from balance billing the patient and requires that they work directly with insurers to agree on out-of-network reimbursement, including utilizing an independent dispute resolution ("IDR") process outlined in the act.

Many states already have addressed balance billing, or surprise medical bills.

These laws and regulations vary in their approach, resulting in different impacts on the health care system as a whole.

In 2021, HHS, DOL and the Department of the Treasury, announced interim final rules ("IFR") intended to implement provisions of the No Surprises Act, certain provisions of which were vacated by a Federal district court in February and July 2022.

The departments then issued a final rule on August 26, 2022, finalizing disclosure requirements relating to information that group health plans and health insurance issuers offering group or individual health insurance coverage must share about the Qualifying Payment Amount ("QPA"), which the departments have stated is generally based on the median contracted rate for a qualified IDR item or service, and requirements related to the consideration of information when a certified IDR entity makes a payment determination under the federal IDR process.

The final rule was also challenged, and the final result is difficult to predict.

Additionally, most states have consumer protection laws that have been the basis for investigations and multi-state settlements relating to financial incentives provided by drug manufacturers to retail pharmacies in connection with product conversion programs.

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Some states have enacted laws that prohibit managed care plan sponsors from implementing certain restrictive benefit plan design features, and many states have laws or have introduced legislation to regulate various aspects of managed care plans, including provisions relating to the pharmacy benefit.

For example, some states, under so-called "freedom of choice" legislation, provide customers of the plan may not be required to use network providers, but must instead be provided with benefits even if they choose to use non-network providers.

For example, some states, under so-called "freedom of choice" legislation, provide that customers of the plan may not be required to use network providers, but must instead be provided with benefits even if they choose to use non-network providers.

Some states have also enacted legislation that can negatively impact the use of cost-saving network configurations for plan sponsors, such as limiting the implementation of pharmacy benefit designs and reimbursement structures that leverage affiliate pharmacies to reduce costs.

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Additionally, Medicare Part D and a majority of states now have laws, regulations or some form of legislation affecting our ability, or our clients' ability, to limit access to a pharmacy provider network or remove a provider from a network.

Such laws, regulations or

legislation may require us or our clients to admit any retail pharmacy or provider willing to meet the plan's terms and conditions for network participation ("any willing provider") or may direct that a provider may not be removed from a network except in compliance with certain procedures ("due process").

Such laws, regulations or legislation may require us or our clients to admit any retail pharmacy or provider willing to meet the plan's terms and conditions for network participation ("any willing provider") or may direct that a provider may not be removed from a network except in compliance with certain procedures ("due process").

Certain states have laws prohibiting certain pharmacy benefit management clients from imposing additional copayments, deductibles, limitations on benefits, or other conditions on covered individuals utilizing a retail pharmacy when the same conditions are not otherwise imposed on covered individuals utilizing home delivery pharmacies.

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the receipt and retention of transmission fees from contracted pharmacies;

performance-based price concessions;

pharmacy price concessions to drug prices at the point of sale;

audits of contracted pharmacies;

use of, administration of, or changes to drug formularies, the use and disclosure of maximum allowable cost ("MAC") pricing, or clinical programs;

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the operations of our subsidiary pharmacies;

referrals to affiliated pharmacies;

disclosure of negotiated provider reimbursement rates;

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disclosure of fees associated with administrative service agreements and patient care programs that are attributable to customers' drug utilization;

utilization management;

and registration or licensing of pharmacy benefit managers.

We expect federal and state governments to continue to prioritize means of addressing out-of-pocket costs for consumers, particularly related to prescription drug costs.

Policy proposals, issued via regulation or legislation, vary broadly in their approaches to achieve that goal.

Current proposed legislation includes, among other things:

repeal of HHS's final rule amending the anti-kickback safe harbors, as described above under the heading "False Claims Act and Anti-Kickback Laws—Anti-Kickback and Referral Laws;" government price negotiation of certain classes of prescription drugs covered by Medicare Part B and D;

limits on manufacturer price increases for prescription drugs;

and a redesign of the Medicare Part D benefit.

Recently enacted legislation, and other policy proposals and regulations vary broadly in their approaches to achieve that goal.

For example, proposed legislation includes, among other things, the Pharmacy Benefit Manager Transparency Act;

the Pharmacy Benefit Manager Accountability Study Act;

a repeal of the 2020 Medicare drug rebate, as described above under the heading "False Claims Act and Anti-Kickback Laws—Anti-Kickback and Referral Laws;" and limits on manufacturer price increases for prescription drugs.

Additionally, proposals at the federal and state levels consider increased regulation of pharmacy benefit managers and health plans as a means to limit consumer out-of-pocket costs, including:

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expanding regulatory requirements or definitions of fiduciaries;

or mandating plan benefit designs that cap consumer out-of-pocket expense.

mandating plan benefit designs that cap consumer out-of-pocket expense.

The NAIC has also proposed laws intended to protect consumer drug benefits and has examined regulatory approaches to pharmacy benefit manager business practices.

Some states have enacted statutes regulating the use of MAC pricing.

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Following this decision, state legislatures and regulators have sought to extend their oversight authority of self-funded ERISA plans to pharmacy benefit management functions and pharmacy benefit plan designs beyond MAC pricing.

In March 2018, the NAIC adopted changes to the Health Carrier Prescription Drug Benefit Management Model Act.

The changes address issues relating to:

(i) transparency, accuracy and disclosure regarding prescription drug formularies and formulary changes during a policy year;

(ii) accessibility of prescription drug benefits using a variety of pharmacy options;

and (iii) tiered prescription drug formularies and discriminatory benefit design.

While the actions of the NAIC do not have the force of law, they are used as a template to influence states to adopt laws based on the model legislation.

The federal Medicaid Drug Rebate Program requires participating drug manufacturers to provide rebates on all drugs reimbursed through state Medicaid programs, including through Medicaid managed care organizations.

Manufacturers of brand-name products must provide a rebate equivalent to the greater of (a) 23.1% of the average manufacturer price ("AMP") paid by retail community

pharmacies or by wholesalers for certain drugs distributed to retail community pharmacies, or (b) the difference between AMP and the "best price" available to essentially any customer other than the Medicaid program and certain other government programs, with certain exceptions.

Manufacturers of brand-name products must provide a rebate equivalent to the greater of (a) 23.1% of the average manufacturer price ("AMP") paid by retail community pharmacies or by wholesalers for certain drugs distributed to retail community pharmacies, or (b) the difference between AMP and the "best price" available to essentially any customer other than the Medicaid program and certain other government programs, with certain exceptions.

We negotiate rebates with drug manufacturers and, in certain circumstances, sell services to drug manufacturers.

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We are not responsible for such calculations, reports or payments.

In February 2022, the FTC began soliciting public comment on pharmacy benefit manager practices and their impact on patients, physicians, employers, independent and chain pharmacies, and other businesses in pharmaceutical distribution.

In June 2022, the FTC announced an inquiry into pharmacy benefit managers and stated the FTC was seeking information concerning the competitive impact of the contracting and business practices of pharmacy benefit managers.

The FTC required the six largest pharmacy benefit managers to provide information and records on topics including rebate contracts and ancillary agreements, documents related to strategies, conditions and plans for formulary placement, formulary exclusion, formulary tier assignment, and prior authorization regarding rebated drug products, and annual pharmacy reimbursement data for drugs on specialty drug lists and for rebated drug products.

In July 2022, the FTC issued an enforcement policy statement indicating the FTC would scrutinize the impact of rebates and fees paid by pharmaceutical manufacturers to pharmacy benefit managers and other intermediaries to determine if laws such as the FTC Act, the Clayton Act, the Robinson-Patman Act and the Sherman Act may have been violated.

Pharmacy Regulation

Our home delivery and specialty pharmacies also subject us to extensive federal, state and local regulation.

The practice of pharmacy is generally regulated at the state level by state boards of pharmacy.

We are licensed to do business as a pharmacy in the states in which our pharmacies are located.

The practice of pharmacy is generally regulated at the state level by state boards of pharmacy, though our pharmacies are subject to laws described above under the headings "Privacy, Security and Data Standards Regulations" and "Consumer Protection Laws." We are licensed to do business as a pharmacy in the states in which our pharmacies are located and the health care professionals that we employ are also licensed by, and subject to, the laws and regulations of state boards of pharmacy and other governmental authorities.

Most of the states into which we deliver pharmaceuticals have laws that require out-of-state home delivery pharmacies to register with, or be licensed by, the board of pharmacy or a similar regulatory body in the state.

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Our various pharmacy facilities also provide services under certain Medicare and state Medicaid programs.

Participation in these programs requires our pharmacies to comply with the applicable Medicare and Medicaid provider rules and regulations, and exposes the pharmacies to various changes the federal and state governments may impose regarding reimbursement methodologies and amounts to be paid to participating providers under these programs.

Participation in these programs requires our pharmacies to comply with the applicable Medicare and Medicaid provider rules and regulations, and exposes the pharmacies to various changes the federal and state governments may impose regarding reimbursement methodologies, the submission of claims and amounts to be paid to participating providers under these programs.

In addition, several of our pharmacy facilities are participating providers under Medicare Part D and are required to adhere to certain requirements applicable to Medicare Part D.

Additionally, we are subject to CMS rules regarding the administration of our Medicare plans and pricing between our plans and related parties, including our pharmacy business.

Other statutes and regulations affect our home delivery and specialty pharmacy operations, including the federal and state anti-kickback laws and the federal civil monetary penalty law described above.

Federal and state statutes and regulations govern the labeling, packaging, advertising, adulteration and security of prescription drugs and the dispensing of controlled substances and certain of our pharmacies must register with the U.S.

Drug Enforcement Administration and individual state controlled substance authorities.

Other statutes and regulations affect our home delivery and specialty pharmacy operations, including the federal and state anti-kickback laws, federal and state false claims acts and the federal civil monetary penalty law described above.

Federal and state statutes and regulations govern the labeling, packaging, repackaging, compounding, storing, holding, disposal, distribution, advertising, misbranding, adulteration, transfer, handling and security of prescription drugs and the dispensing of prescription, over-the-counter,

hazardous and controlled substances and certain of our pharmacies must register with the U.S.

Drug Enforcement Administration, the U.S.

Food and Drug Administration and individual state controlled substance authorities.

The FTC requires mail order sellers of goods generally to engage in truthful advertising, to stock a reasonable supply of the product to be sold, to fill mail orders within thirty days and to provide clients with refunds when appropriate.

The United States Postal Service also has significant statutory authority to restrict the delivery of drugs and medicines through the mail.

Violations of pharmacy laws and regulations may result in warning letters, civil and criminal penalties, seizures, suspension, termination or revocation of licenses and registrations, restrictions on facilities or operations, and other enforcement actions.

Financial Reporting, Internal Control and Corporate Governance

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In addition, the holding company acts of states in which our subsidiaries are domiciled restrict the ability of any person to obtain control of an insurance company or HMO subsidiary without prior regulatory approval.

State holding company laws and regulations also subject our insurance companies and certain HMO subsidiaries to additional regulatory scrutiny related to their oversight of affiliates performing regulated services on behalf of the insurance company or HMO and require the Company to file an annual Enterprise Risk Report, which summarizes material risks that could pose enterprise risk to the insurance company subsidiaries.

State holding company laws and regulations also subject our insurance companies and certain HMO subsidiaries to additional regulatory scrutiny related to their oversight of affiliates

performing regulated services on behalf of the insurance company or HMO and require the Company to file an annual Enterprise Risk Report, which summarizes material risks that could pose enterprise risk to the insurance company subsidiaries.

Marketing, Advertising and Products

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International Regulations

Our operations outside the United States expose us to laws of multiple jurisdictions and the rules and regulations of various governing bodies and regulators, including those related to the provision of insurance, financial and other disclosures, the provision of health

care-related services, corporate governance, privacy, data protection, data mining, data transfer, intellectual property, labor and employment, consumer protection, direct-to-consumer communications activities, tax, anti-corruption and anti-money laundering.

Our operations outside of the United States expose us to laws of multiple jurisdictions and the rules and regulations of various governing bodies and regulators, including those related to the provision of insurance, financial and other disclosures, the provision of health care-related services, corporate governance, privacy, data protection, data mining, data transfer, intellectual property, labor and employment, consumer protection, direct-to-consumer communications activities, tax, anti-corruption and anti-money laundering.

Foreign laws and rules may include requirements that are different from, or more stringent than, similar requirements in the United States.

Our operations in countries outside the United States:

Our operations in countries outside of the United States:

• are subject to local regulations of the jurisdictions where we operate;

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• in all cases, are subject to the Foreign Corrupt Practices Act ("FCPA").

In particular, in South Korea, regulators are focused on protecting the rights of individual customers by enforcing "Treating Customers Fairly" concepts.

This regulatory focus has resulted in rigorous data localization requirements, network separation obligations and system monitoring restrictions, as well as obligations to closely monitor marketing communications and sales scripts.

Anti-money laundering requirements in South Korea and other countries where we do business also may impose obligations to collect certain information about each customer at time of sale or to risk rank each customer to determine possible future money laundering risk.

Anti-money laundering requirements in countries where we do business also may impose obligations to collect certain information about each customer at time of sale or to risk rank each customer to determine possible future money laundering risk.

The FCPA prohibits offering, promising, providing or authorizing others to give anything of value to a foreign government official or employee to obtain or retain business or otherwise secure a business advantage.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business