What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2025-02-20 compared with 2024-02-21 · 568 added, 523 removed, 1758 unchanged (38% of the section changed)

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(1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments.

The communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the account or disclosures to which it relates.

Valuation of Incurred but Not Paid Claims

Description of the Matter Medical claims payable was $15,746 million at December 31, 2024, a significant portion of which related to the Company’s estimate for claims that are incurred but not paid.

As discussed in Note 2 to the consolidated financial statements, the Company’s liability for incurred but not paid claims is determined using actuarial methods that include a number of factors and assumptions, including completion factors, which represent the average percentage of total incurred claims that have been paid through a given date after being incurred based on historical paid claims data, and trend factors, which represent an estimate of claims expense based on recent claims expense levels and healthcare cost levels.

As discussed in Note 2 to the consolidated financial statements, the Company’s liability for incurred but not paid claims is determined using actuarial methods that include a number of factors and assumptions, including completion factors, which represent the average percentage of total incurred claims that have been paid through a given date after being incurred, and trend factors, which represent an estimate of claims expense based on recent claims expense levels and healthcare cost levels.

There is significant uncertainty inherent in determining management’s best estimate of completion and trend factors, which are used to calculate actuarial estimates of incurred but not paid claims.

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To test the Company’s liability for incurred but not paid claims, our audit procedures included, among others, testing the completeness and accuracy of the underlying claims and membership data recorded in the source claims processing and disbursement systems to the data used by management in developing completion and trend factor assumptions and agreeing a sample of incurred and paid claims to source documentation.

With the support of actuarial specialists, we analyzed the Company’s completion and trend factor assumptions based on historical claim experience and emerging cost trends and independently calculated a range of reasonable reserve estimates for comparison to management’s best estimate of the liability for incurred but not paid claims.

With the support of actuarial specialists, we evaluated the methodologies applied by the Company in determining the actuarially determined liability and management's actuarial assumptions, including trend and completion factor assumptions, used in their analysis based on historical claim experience and independently calculated a range of reasonable reserve estimates for comparison to management’s best estimate of the liability for incurred but not paid claims.

Additionally, we performed a review of the prior period liabilities for incurred but not paid claims to subsequent claims development.

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Other current assets 4,700 5,795

Assets held for sale 490 —

Total current assets 58,942 60,029

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Other current liabilities 10,029 9,894

Liabilities held for sale 153 —

Total current liabilities 40,581 41,791

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Net investment income 2,051 1,825 1,485

Net (losses) gains on financial instruments ( 694 ) ( 550 ) 318

Net losses on financial instruments

( 445 ) ( 694 ) ( 550 )

Gain on sale of business

Total revenues 177,011 171,340 156,595

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Amortization of other intangible assets 580 885 767

Loss on extinguishment of debt — — 21

Total expenses 169,107 163,625 148,995

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Net income 5,971 5,991 5,888

Net (gain) loss attributable to noncontrolling interests

Net loss (gain) attributable to noncontrolling interests

Shareholders’ net income $ 5,980 $ 5,987 $ 5,894

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Diluted $ 25.68 $ 25.22 $ 24.28

Dividends per share $ 5.92 $ 5.12 $ 4.52

See accompanying notes.

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Change in net unrealized gains/losses on cash flow hedges 4 18 10

Change in net periodic pension and postretirement costs 40 ( 70 ) 123

Change in net periodic pension and other benefit costs

Change in future policy benefits ( 2 ) ( 3 ) 32

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160 1,171 ( 2,304 )

Net (gain) loss attributable to noncontrolling interests

Net loss (gain) attributable to noncontrolling interests

Other comprehensive loss attributable to noncontrolling interests 6 6 11

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Adjustments to reconcile net income to net cash provided by operating activities:

Net losses (gains) on financial instruments 694 550 ( 318 )

Net losses on financial instruments

Gain on sale of business

Equity in net earnings (losses) of other invested assets ( 1 ) 33 ( 293 )

33 ( 293 ) ( 562 )

Depreciation and amortization 1,393 1,745 1,675

Deferred income taxes ( 374 ) ( 602 ) ( 115 )

Impairment of property and equipment 446 7 73

Impairment of property, equipment and right-of-use assets

Share-based compensation 191 289 264

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Purchases of subsidiaries, net of cash acquired ( 4,809 ) ( 1,552 ) ( 649 )

Proceeds from sales of subsidiaries, net of cash sold 363 — —

Purchases of property and equipment ( 1,256 ) ( 1,296 ) ( 1,152 )

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Other, net 2 7 41

Net cash (used in) provided by financing activities ( 3,349 ) ( 1,318 ) 423

Net cash provided by (used in) financing activities

1,193 ( 3,349 ) ( 1,318 )

Effect of foreign exchange rates on cash and cash equivalents ( 6 ) ( 1 ) ( 14 )

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Cash and cash equivalents at beginning of year 6,526 7,387 4,880

Less cash and cash equivalents included in assets held for sale at end of year

Cash and cash equivalents at end of year $ 8,288 $ 6,526 $ 7,387

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January 1, 2022 241.8 $ 2 $ 9,148 $ 27,119 $ ( 197 ) $ 68 $ 36,140

Net income — — — 6,158 — ( 9 ) 6,149

Net income (loss) — — — 5,894 — ( 6 ) 5,888

Other comprehensive loss — — — — ( 2,293 ) ( 11 ) ( 2,304 )

Accumulated noncontrolling interest

Noncontrolling interests adjustment

— — — — — 36 36

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December 31, 2022 238.0 2 9,084 29,647 ( 2,490 ) 87 36,330

Adoption of Accounting Standards Update 2020-06 (Note 2) — — — ( 23 ) — — ( 23 )

January 1, 2022

241.8 2 9,148 27,119 ( 197 ) 68 36,140

Net income — — — 5,987 — 4 5,991

Other comprehensive loss — — — — ( 2,293 ) ( 11 ) ( 2,304 )

Other comprehensive income (loss) — — — — 1,177 ( 6 ) 1,171

Noncontrolling interests adjustment

— — — — — 14 14

Repurchase and retirement of common stock ( 4.8 ) — ( 184 ) ( 2,132 ) — — ( 2,316 )

Repurchase and retirement of common stock, including excise tax ( 5.8 ) — ( 217 ) ( 2,481 ) — — ( 2,698 )

Dividends and dividend equivalents — — — ( 1,404 ) — — ( 1,404 )

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December 31, 2023 233.1 2.0 8,868.0 31,749.0 ( 1,313.0 ) 99.0 39,405.0

Net income — — — 5,987 — 4 5,991

Net income (loss)

— — — 5,980 — ( 9 ) 5,971

Other comprehensive income (loss) — — — — 166 ( 6 ) 160

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— — — — — 27 27

Repurchase and retirement of common stock ( 5.8 ) — ( 217 ) ( 2,481 ) — — ( 2,698 )

Repurchase and retirement of common stock, including excise tax ( 6.7 ) — ( 262 ) ( 2,662 ) — — ( 2,924 )

Dividends and dividend equivalents — — — ( 1,518 ) — — ( 1,518 )

Issuance of common stock under employee stock plans, net of related tax benefits 1.1 — 305 — — — 305

Convertible debenture repurchases and conversions — — ( 341 ) — — — ( 341 )

December 31, 2024 227.5 $ 2 $ 8,911 $ 33,549 $ ( 1,147 ) $ 111 $ 41,426

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In addition, we provide a broad array of managed care services to fee-based customers, including claims processing, stop loss insurance, provider network access, medical management, care management, wellness programs, actuarial services and other administrative services.

We provide services to the federal government in connection with our Federal Health Products & Services business, which administers the Federal Employees Health Benefits (“FEHB”) Program.

We provide an array of specialty services both to customers of our subsidiary health plans and also to unaffiliated health plans, including pharmacy services, dental, vision, life, disability and supplemental health insurance benefits, as well as integrated health services.

We provide services to the federal government in connection with our Federal Health Products & Services business, which administers the Federal Employee Program ® (“FEP ® ”).

We provide an array of specialty services both to customers of our subsidiary health plans and to unaffiliated health plans, including pharmacy services, stop loss insurance, dental, vision and supplemental health insurance benefits, as well as integrated health services.

We are an independent licensee of the Blue Cross and Blue Shield Association (“BCBSA”), an association of independent health benefit plans.

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We also conduct business through arrangements with other BCBS licensees as well as other strategic partners.

In addition, we serve members in numerous states as Amerigroup, Freedom Health, HealthSun, MMM, Optimum Healthcare, Simply Healthcare and/or Wellpoint.

In addition, we serve members in numerous states as Wellpoint, Carelon, MMM and/or Simply Healthcare.

We are licensed to conduct insurance operations in all 50 states, the District of Columbia and Puerto Rico through our subsidiaries.

As we announced in 2022, we are organizing our brand portfolio into the following core go-to-market brands:

• Anthem Blue Cross/Anthem Blue Cross and Blue Shield — represents our existing Anthem-branded and affiliated Blue Cross and/or Blue Shield licensed plans;

• Wellpoint — we are uniting select non-BCBSA licensed Medicare, Medicaid and commercial plans under the Wellpoint name;

We have organized our brand portfolio into the following core go-to-market brands:

• Anthem Blue Cross/Anthem Blue Cross and Blue Shield — represents our Anthem-branded and affiliated Blue Cross and/or Blue Shield licensed plans;

• Wellpoint — unites select non-BCBSA licensed Medicare, Medicaid and commercial plans under the Wellpoint name;

• Carelon — this brand brings together our healthcare related services and capabilities, including our CarelonRx and Carelon Services businesses, under a single brand name.

Our branding strategy reflects the evolution of our business from a traditional health insurance company to a lifetime, trusted health partner.

Given this evolution, we reviewed and modified how we manage our business, monitor our performance and allocate resources, and made changes to our reportable segments beginning in the first quarter of 2023.

We now report our results of operations in the following four reportable segments:

Health Benefits (aggregates our previously reported Commercial & Specialty Business and Government Business segments), CarelonRx, Carelon Services (previously included in our Other segment) and Corporate & Other (our businesses that do not individually meet the quantitative thresholds for an operating segment, as well as corporate expenses not allocated to our other reportable segments).

During the fourth quarter of 2023, we moved our Carelon Global Solutions international businesses from the Corporate & Other reportable segment to the Carelon Services reportable segment.

All prior period reportable segment information has been

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Notes to Consolidated Financial Statements (continued)

reclassified for comparability to conform to the current presentation.

We report our results of operations in the following four reportable segments:

Health Benefits, CarelonRx, Carelon Services and Corporate & Other (our businesses that do not individually meet the quantitative thresholds for an operating segment, as well as corporate expenses not allocated to our other reportable segments).

For additional discussion, see Note 20, “Segment Information.”

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All significant intercompany accounts and transactions have been eliminated in consolidation.

The accompanying consolidated financial statements and the notes to the consolidated financial statements have been recast and are presented as they would have appeared had we changed our reportable segments, discussed in Note 20, “Segment Information,” and adopted the long-duration contracts accounting standard, discussed in this Note 2 below, prior to January 1, 2023.

Our consolidated financial

Elevance Health, Inc.

Notes to Consolidated Financial Statements (continued)

statements include the accounts of Elevance Health, Inc.

and subsidiaries that we control, including variable interest entities for which we are the primary beneficiary.

We are considered the primary beneficiary if we have the power to direct the variable interest entity's most significant economic activities, and we have the right to receive benefits or obligations to absorb losses that could be significant to the entity.

We evaluate the following criteria:

(1) the structure and purpose of the entity;

(2) the risks and rewards created by and shared through the entity;

and (3) our ability to direct its activities, receive its benefits and absorb its losses relative to the other parties involved with the entity.

Certain of our subsidiaries operate outside of the United States and have functional currencies other than the U.S.

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For mortgage-backed and asset-backed securities, cash flow estimates are based on assumptions regarding the underlying collateral, including prepayment speeds, vintage, type of underlying asset, geographic concentrations, default rates, recoveries and changes in value.

For all other securities, cash flow estimates are driven by assumptions regarding

Elevance Health, Inc.

Notes to Consolidated Financial Statements (continued)

probability of default, including changes in credit ratings and estimates regarding timing and amount of recoveries associated with a default.

For all other securities, cash flow estimates are driven by assumptions regarding probability of default, including changes in credit ratings and estimates regarding timing and amount of recoveries associated with a default.

For asset-backed securities included in fixed maturity securities, we recognize income using an effective yield based on anticipated prepayments and the estimated economic life of the securities.

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Such adjustments are reported within net investment income.

Elevance Health, Inc.

Notes to Consolidated Financial Statements (continued)

The changes in fair value of our marketable equity securities are recognized in our results of operations within net gains and losses on financial instruments.

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The cash surrender value of the corporate-owned life insurance policies is reported under the caption “Other invested assets” in our consolidated balance sheets.

We use the equity method of accounting for investments in companies in which our ownership interest may enable us to influence the operating or financial decisions of the investee company.

Our proportionate share of equity in net income of these unconsolidated affiliates is reported within net investment income.

The equity method investments are reported under the caption “Other invested assets” in our consolidated balance sheets.

We have investments in limited partnerships (“LPs”) and companies in which our ownership interest may enable us to influence the operating or financial decisions of the investee company, including unconsolidated variable interest entities.

These investments are accounted for using the equity method of accounting and are reported within “Other invested assets” in our consolidated balance sheets.

Our proportionate share of equity in net income for these LPs and unconsolidated investee companies is reported within “Net investment income” in our consolidated statements of income.

The carrying value of these investments are written down, or impaired, to fair value when a decline in value is considered to be other-than temporary.

In applying the equity method (including assessment for other-than temporary impairment), we use financial information provided by the LPs and investee companies, generally on a one-to three-month lag.

We consolidate investee companies in certain other instances where it is deemed to exercise control, or is considered the primary beneficiary of a variable interest entity.

Investment income is recorded when earned.

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Self-funded receivables are reported net of an allowance for doubtful accounts of $ 115 and $ 87 at December 31, 2024 and 2023, respectively.

Other receivables include pharmacy rebates, provider advances, claims recoveries, reinsurance receivables, proceeds due from brokers on investment trades that have not yet settled, accrued investment income and other miscellaneous amounts due

Elevance Health, Inc.

Notes to Consolidated Financial Statements (continued)

Other receivables include pharmacy rebates, provider advances, claims recoveries, reinsurance receivables, proceeds due from brokers on investment trades, accrued investment income and other miscellaneous amounts due to us.

These receivables are reported net of an allowance for doubtful accounts of $ 1,385 and $ 941 at December 31, 2024 and 2023, respectively.

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FASB guidance requires business combinations to be accounted for using the acquisition method of accounting, and it also specifies the types of acquired intangible assets that are required to be recognized and reported separately from goodwill.

Goodwill represents the excess of the cost of acquisition over the fair value of net assets acquired.

Goodwill represents the excess of the cost of acquisition over the fair value of net assets acquired, including other intangible assets.

Other intangible assets represent the values assigned to customer relationships, provider and hospital networks, Blue Cross and Blue Shield and other trademarks, licenses and other agreements, such as non-compete agreements.

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FASB guidance allows for qualitative assessments of whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount for purposes of a goodwill impairment analysis and whether it is more likely than not that an indefinite-lived intangible asset is impaired for purposes of an indefinite-lived intangible asset impairment analysis.

Estimated fair values developed based on our assumptions and judgments might be different if other reasonable assumptions

Estimated fair values developed based on our assumptions and judgments might be different if other reasonable assumptions and estimates were to be used.

Qualitative analysis involves assessing situations and developments that could affect key

Elevance Health, Inc.

Notes to Consolidated Financial Statements (continued)

and estimates were to be used.

Qualitative analysis involves assessing situations and developments that could affect key drivers used to evaluate whether the fair value of our goodwill and indefinite-lived intangible assets are impaired.

drivers used to evaluate whether the fair value of our goodwill and indefinite-lived intangible assets is impaired.

Our procedures include assessing our financial performance, macroeconomic conditions, industry and market considerations, various asset specific factors, and entity specific events.

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and book value of invested capital.

A goodwill impairment loss is recognized to the extent that the carrying amount exceeds the asset’s fair value.

This determination consists of a one-step test comparing the fair value of a reporting unit, including goodwill, to its carrying amount.

If the carrying amount of a reporting unit exceeds its fair value, an impairment loss is recognized.

This goodwill impairment loss is equal to the excess of the reporting unit’s carrying amount over its fair value.

A goodwill impairment loss is recognized to the extent that the carrying amount exceeds the asset’s estimated fair value.

This determination consists of a one-step test comparing the estimated fair value of a reporting unit, including goodwill, to its carrying amount.

If the carrying amount of a reporting unit exceeds its estimated fair value, an impairment loss is recognized.

This goodwill impairment loss is equal to the excess of the reporting unit’s carrying amount over its estimated fair value, which is recorded in the results of operations.

Fair value for purposes of a quantitative impairment test for indefinite-lived intangible assets is estimated using a projected income approach.

We recognize an impairment loss when the estimated fair value of indefinite-lived intangible assets is less than the carrying value.

We recognize an impairment loss when the estimated fair value of indefinite-lived intangible assets is less than the carrying value, which is recorded in the results of operations.

If significant impairment indicators are noted relative to other intangible assets subject to amortization, we may be required to record impairment losses against future income.

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We have used these types of instruments as designated hedges against specific liabilities.

All investments in derivatives are recorded as assets or liabilities at fair value.

All investments in derivatives are recorded as assets or liabilities at fair value, except certain put and call options on large blocks of equity securities.

Put and call options on large blocks of equity securities are initially recorded at fair value;

however, they are not subsequently marked to market.

If certain correlation, hedge effectiveness and risk reduction criteria are met, a derivative may be specifically designated as a hedge of exposure to changes in fair value or cash flow.

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From time to time, we may also purchase derivatives to hedge, on an economic basis, our exposure to foreign currency exchange fluctuations associated with the operations of certain of our subsidiaries.

We generally use futures or forward contracts for these transactions.

We generally do not designate these contracts as hedges and, accordingly, the changes in fair value of these derivatives are recognized in results of operations immediately.

Credit exposure associated with non-performance by the counterparties to derivative instruments is generally limited to the uncollateralized fair value of the asset related to instruments recognized in the consolidated balance sheets.

We attempt to

We generally use futures or forward

Elevance Health, Inc.

Notes to Consolidated Financial Statements (continued)

mitigate the risk of non-performance by selecting counterparties with high credit ratings and monitoring their creditworthiness and by diversifying derivatives among multiple counterparties.

contracts for these transactions.

We generally do not designate these contracts as hedges and, accordingly, the changes in fair value of these derivatives are recognized in results of operations immediately.

As part of our international operations, we conduct transactions in foreign currencies, which exposes us to risks associated with fluctuations in foreign currency exchange rates.

To manage this exposure, we utilize forward contracts to hedge expenses that are denominated in currencies other than the U.S.

These forward contracts are designated as cash flow hedges and qualify for hedge accounting treatment under the applicable accounting standards.

We attempt to mitigate the risk of non-performance by selecting counterparties with high credit ratings and monitoring their creditworthiness and by diversifying derivatives among multiple counterparties.

At December 31, 2024, we believe there were no material concentrations of credit risk with any individual counterparty.

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Prepaid pension benefits represent prepaid costs related to defined benefit pension plans and are reported with other noncurrent assets.

Postretirement benefits represent outstanding obligations for retiree medical, life, vision and dental benefits.

Liabilities for pension and other postretirement benefits are reported with noncurrent assets, current liabilities and noncurrent liabilities based on the amount by which the actuarial present value of benefits payable in the next twelve months included in the benefit obligation exceeds the fair value of plan assets.

Prepaid postretirement benefits represent prepaid costs related to retiree medical, life, vision and dental benefits and are reported with other noncurrent assets.

We determine the expected return on plan assets using the calculated value of plan assets, which recognizes changes in the fair value of plan assets in a systematic manner over three years.

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Liabilities for medical claims payable include estimated provisions for incurred but not paid claims on an undiscounted basis, as well as estimated provisions for expenses related to the processing of claims.

Incurred but not paid claims include (1) an estimate for claims that are incurred but not reported, as well as claims reported to us but not yet processed through our systems;

Incurred but not paid claims include (1) an estimate for claims that are incurred but not reported;

(2) claims reported to us but not yet processed through our systems;

and (3) claims reported to us and processed through our systems but not yet paid.

Liabilities for both claims incurred but not reported and reported but not yet processed through our systems are determined in the aggregate, employing actuarial methods that are commonly used by health insurance actuaries and meet Actuarial Standards of Practice.

Liabilities for claims incurred but not reported and reported but not yet processed through our systems are determined in the aggregate, employing actuarial methods that are commonly used by health insurance actuaries and meet Actuarial Standards of Practice.

Our reserving practice for claim liabilities is to consistently recognize the appropriate amount of reserve within a level of confidence required by Actuarial Standards of Practice.

We determine the amount of the liability for incurred but not paid claims by following a detailed actuarial process that uses both historical claim payment patterns as well as emerging medical cost trends to project our best estimate of claim liabilities.

We determine the amount of the liability for incurred but not yet reported or processed claims by following a detailed actuarial process that uses both historical claim payment patterns as well as emerging medical cost trends to project our best estimate of claim liabilities.

Under this process, historical paid claims data is formatted into “claim triangles,” which compare claim incurred dates to the dates of claim payments.

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Actuarial estimates of incurred but not paid claim liabilities are then determined by subtracting the actual paid claims from the estimate of the ultimate incurred claims.

Elevance Health, Inc.

Notes to Consolidated Financial Statements (continued)

For the most recent incurred months (typically the most recent two months), the percentage of claims paid for claims incurred in those months is generally low.

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We utilize subsequent paid claims activity to monitor and continuously adjust the claims liability and benefit expense.

Elevance Health, Inc.

Notes to Consolidated Financial Statements (continued)

actual results are determined to be materially different than assumptions regarding cost trends and utilization, future periods of our income statement and overall financial position could be impacted.

Premium deficiencies are recognized when it is probable that expected claims and administrative expenses will exceed future premiums on existing medical insurance contracts without consideration of investment income.

Determination of premium deficiencies for longer duration life and disability contracts includes consideration of investment income.

If actual results are determined to be materially different than assumptions regarding cost trends and utilization, future periods of our income statement and overall financial position could be impacted.

Premium deficiencies are recognized when it is probable that expected claims plus administrative expenses will exceed future premiums on existing medical insurance contracts without consideration of investment income.

For purposes of evaluating premium deficiencies, contracts are deemed to be either short or long duration and are grouped in a manner consistent with our method of acquiring, servicing and measuring the profitability of such contracts.

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Other policyholder liabilities include rate stabilization reserves associated with retrospectively rated insurance contracts and certain case-specific reserves.

Other policyholder liabilities also include liabilities for premium refunds based upon the minimum medical loss ratio (“MLR”), the relative health risk of members, and other contractual or regulatory requirements.

Rate stabilization reserves represent accumulated premiums that exceed what customers owe us based on actual claim experience.

The timing of payment of these retrospectively rated refunds is based on the contractual terms with our customers and can vary from period to period based on the specific contractual requirements.

Other policyholder liabilities also include liabilities for premium refunds based upon the minimum medical loss ratio (“MLR”).

We are required to meet certain minimum MLR thresholds prescribed by the Patient Protection and Affordable Care Act and the Health Care and Education Reconciliation Act of 2010, as amended (collectively, the “ACA”).

If we do not meet or exceed the minimum MLR thresholds specified by the ACA, we are required to pay rebates to certain customers.

Minimum MLR rebates are calculated by subsidiary, state and applicable line of business in accordance with regulations issued by the Department of Health and Human Services (“HHS”).

Minimum MLR rebates are calculated by subsidiary, state and applicable line of business in accordance with regulations issued by the US Department of Health and Human Services (“HHS”).

Such calculations are made using estimated calendar year medical loss expense and premiums, as defined by HHS.

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In addition, profit amounts included in our payments to third-party administrative service providers are recorded as benefit expense in our consolidated GAAP financial statements, while HHS does not allow for the inclusion of these expenses within the medical loss expense for purposes of calculating minimum MLR.

Also included are our risk-adjustment payables for certain risk-adjustment programs.

The risk-adjustment programs reallocate funds from insurers with lower risk populations to insurers with higher risk populations based on the relative risk scores of participants.

We estimate our payable based on the risk of our customers compared to the risk of other customers in the same state and market, considering data obtained from industry studies and HHS.

Payables are recorded as adjustments to premium revenue based on our year-to-date experience when the amounts are reasonably estimable and collection is reasonably assured.

Final revenue adjustments are determined by HHS in the year following the policy year.

Reserves for Future Policy Benefits:

Reserves for future policy benefits include liabilities for life and long-term disability insurance policy benefits based upon interest, mortality and morbidity assumptions from published actuarial tables, modified based upon our experience.

Future policy benefits also include liabilities for insurance policies for which some of the premiums received in earlier years are intended to pay anticipated benefits to be incurred in future years.

Future policy benefits include liabilities for insurance policies for which some of the premiums received in earlier years are intended to pay anticipated benefits to be incurred in future years.

Future policy benefits are continually monitored and reviewed, and when reserves are adjusted, differences are reflected in benefit expense.

Elevance Health, Inc.

Notes to Consolidated Financial Statements (continued)

We believe that our liabilities for future policy benefits, along with future premiums received, are adequate to satisfy our ultimate benefit liability;

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Premium payments from contracted government agencies are based on eligibility lists produced by the government agencies.

Premiums related to the unexpired contractual coverage periods are reflected in the accompanying consolidated balance sheets as unearned income.

Premiums include revenue adjustments for retrospectively rated contracts where revenue is based on the estimated loss experience of the

Elevance Health, Inc.

Notes to Consolidated Financial Statements (continued)

Premium payments related to the unexpired contractual coverage periods are reflected in the accompanying consolidated balance sheets as Unearned income.

Premiums include revenue adjustments for retrospectively rated contracts where revenue is based on the estimated loss experience of the contract.

Premium rates for certain lines of business are subject to approval by the Department of Insurance of each respective state.

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The estimation of variable consideration to be recognized requires significant judgment in the determination of the level of achievement of performance incentives, service level achievements subject to performance penalties, and the completion level of tasks subject to implementation fees.

Product revenue includes revenue for services performed by CarelonRx for unaffiliated pharmacy customers as well as any co-payments and subsidies made by or on behalf of affiliated customers.

Product revenue represents services performed by CarelonRx for unaffiliated pharmacy customers and includes ingredient costs (net of any rebates or discounts), including co-payments made by or on behalf of the customer, and service fees.

Unaffiliated pharmacy customers include our fee-based groups that have contracted with CarelonRx for pharmacy services and third-party health plans.

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Overall, control over these activities indicate CarelonRx is primarily responsible for fulfilling the promise to provide pharmacy services.

Product revenue includes ingredient costs (net of any rebates or discounts), including any co-payments and subsidies made by or on behalf of the customer, and administrative fees.

CarelonRx recognizes revenue when control of the prescription drugs is transferred to customers, in an amount it expects to be entitled to in exchange for the products or services provided.

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Revenue recognized in 2024 and 2023 from performance obligations related to prior years, such as due to changes in transaction price, was not material.

For contracts that have an original expected duration of greater than one year, revenue expected to be recognized in future periods related to unfulfilled contractual performance obligations and contracts with variable consideration related to undelivered performance obligations is not material.

For contracts that

Elevance Health, Inc.

Notes to Consolidated Financial Statements (continued)

have an original expected duration of greater than one year, revenue expected to be recognized in future periods related to unfulfilled contractual performance obligations and contracts with variable consideration related to undelivered performance obligations is not material.

Cost of Products Sold:

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Stock options are granted for a fixed number of shares with an exercise price at least equal to the fair value of the shares at the date of the grant.

Restricted stock awards are

Elevance Health, Inc.

Notes to Consolidated Financial Statements (continued)

issued at the fair value of the stock on the grant date.

Restricted stock awards are issued at the fair value of the stock on the grant date.

The employee stock purchase plan allows for a purchase price per share which is 90 % of the fair value of a share of common stock on the lower of the first or last trading day of the plan quarter.

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We market our products through direct marketing activities and an extensive network of independent agents, brokers and retail partnerships for Individual and Medicare customers, and for certain Employer Group risk-based customers with a smaller employee base.

Products for Employer Group risk-based customers with a larger employee base are generally sold through independent brokers or consultants retained by the customer who work with industry specialists from our in-house sales force.

Products for our Employer Group risk-based customers with a larger employee base are generally sold through independent brokers or consultants retained by the customer who work with industry specialists from our in-house sales force.

In the Individual and Group markets, we offer products through state or federally facilitated marketplaces, or Public Exchanges, and off-exchange products.

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See Note 18, “Leases,” for additional information about the ROU asset impairment and abandonment charges.

Elevance Health, Inc.

Notes to Consolidated Financial Statements (continued)

Shareholders ’ Earnings per Share:

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The difference between the number of shares assumed issued and the number of shares assumed purchased represents the dilutive shares.

Elevance Health, Inc.

Notes to Consolidated Financial Statements (continued)

Recently Adopted Accounting Guidance:

In November 2023, the FASB issued Accounting Standards Update No.

2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures (“ASU 2023-07”).

The amendments in ASU 2023-07 are intended to improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses.

ASU 2023-07 is effective for our fiscal year beginning after December 15, 2023, and interim periods within our fiscal year beginning after December 15, 2024.

The amendments are to be applied retrospectively to all prior periods presented in the financial statements, and upon transition, the significant segment expense categories and amounts disclosed in the prior periods should be based on the significant segment expense categories identified and disclosed in the period of adoption.

The adoption of ASU 2023-07 did not have an impact on our results of operations or our consolidated cash flows.

In November 2020, the FASB issued Accounting Standards Update No.

2020-11, Financial Services—Insurance (Topic 944):

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While the adoption did not have an overall material impact, our prior period financial statements presented in this Annual Report on Form 10-K have been restated to reflect the impacts of our adoption as required by the new standard.

Adjustments of $( 131 ) and $ 54 , respectively, were made to shareholders’ net income for the years ended December 31, 2022 and 2021, which include adjustments to benefit expense of $ 155 and $( 74 ), respectively.

In addition, the following balance sheet adjustments were made at years ended December 31, 2022 and 2021:

$( 17 ) and $( 4 ), respectively, to total assets;

$ 47 and $( 39 ), respectively, to total liabilities;

$ 13 and $( 19 ), respectively, to accumulated other comprehensive loss;

and $( 64 ) and $ 35 , respectively to shareholders’ equity and total equity.

In August 2020, the FASB issued Accounting Standards Update No.

2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40):

Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity (“ASU 2020-06”) .

The amendments eliminate two of the three accounting models that require separate accounting for convertible features of debt securities, simplify the contract settlement assessment for equity classification, require the use of the if-converted method for all convertible instruments in the diluted shareholders’ earnings per share calculation and expand disclosure requirements.

The amendments became effective for our annual and interim reporting periods beginning after December 15, 2021.

We adopted ASU 2020-06 on January 1, 2022 using the modified retrospective transition method, which resulted in an increase to our reported debt outstanding of $ 31 , a decrease to our deferred tax liabilities of $ 8 , and a corresponding cumulative-effect reduction to our opening retained earnings of $ 23 , by eliminating the bifurcation of the embedded conversion option.

These amounts were not material to our overall consolidated financial position.

The adoption of ASU 2020-06 did not have an impact on our results of operations or our consolidated cash flows.

Use of the if-converted method did not have an impact on our overall shareholders’ earnings per share calculation.

An adjustment of $( 131 ) was made to shareholders’ net income for the year ended December 31, 2022, which include an adjustment to benefit expense of $ 155 .

In addition, the following balance sheet adjustments were made for the year ended December 31, 2022:

$( 17 ) to total assets;

$ 47 to total liabilities;

$ 13 to accumulated other comprehensive loss;

and $( 64 ) to shareholders’ equity and total equity.

Recent Accounting Guidance Not Yet Adopted:

In November 2024, the FASB issued Accounting Standards Update No.

2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures (“ASU 2023-07”).

The amendments in ASU 2023-07 are intended to improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses.

2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40):

Disaggregation of Income Statement Expenses (“ASU 2024-03”).

This standard requires additional expense breakdowns in the footnotes for items such as inventory purchases, employee compensation, depreciation, and intangible asset amortization.

Public companies must also provide a qualitative description of remaining expense amounts not separately disclosed, as well as the definition and total amount of selling expenses.

ASU 2024-03 is effective for our fiscal year beginning after December 15, 2026, and interim periods within our fiscal year beginning after December 15, 2027.

The amendments are to be applied either prospectively to financial statements issued for reporting periods after the effective date of the update, or retrospectively to all prior periods presented in the financial statements.

We are currently evaluating the effects the adoption of ASU 2024-03 will have on our consolidated financial statements and related disclosures.

In December 2023, the FASB issued Accounting Standards Update No.

2023-09, Income Taxes (Topic 740) (“ASU 2023-09”).

The amendments in ASU 2023-09 are intended to improve income tax disclosures, primarily related to the rate reconciliation and income taxes paid information.

ASU 2023-09 is effective for our fiscal year beginning after December 15, 2024.

The amendments are to be applied on a prospective basis, although retrospective adoption is permitted.

We do not believe the adoption of ASU 2023-09 will have a material impact on our consolidated financial statements or disclosures.

Elevance Health, Inc.

Notes to Consolidated Financial Statements (continued)

In August 2023, the FASB issued Accounting Standards Update No.

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There were no other new accounting pronouncements that were issued or became effective during the year ended December 31, 2024 that had, or are expected to have, a material impact on our financial position, results of operations, cash flows or financial statement disclosures.

Elevance Health, Inc.

Notes to Consolidated Financial Statements (continued)

Business Acquisitions and Divestitures

Completed Acquisitions

During the year ended December 31, 2023, we completed business combinations for total cash consideration of approximately $ 1,655 .

These acquisitions included BioPlus Parent, LLC and subsidiaries (“BioPlus”) which were acquired in February 2023.

Prior to the acquisition, BioPlus was one of the largest independent specialty pharmacy organizations in the United States.

BioPlus seeks to connect payors and providers of specialty pharmaceuticals to meet the medication therapy needs of patients with complex medical conditions.

On December 31, 2024, we completed our acquisition of Centers Plan for Healthy Living LLC and Centers for Specialty Care Group IPA, LLC (“Centers”).

Centers is a managed long-term care plan that serves New York state Medicaid and dual-eligible Medicaid/Medicare members, enabling adults with long-term care needs and disabilities to live safely and independently in their own home.

This acquisition aligns with our strategic plan to grow the Health Benefits segment and leverage industry-leading expertise while serving Medicaid and dual-eligible populations.

As of December 31, 2024, the purchase price was allocated to the tangible and intangible net assets acquired based on management's initial estimates of their fair values, of which $ 152 has been allocated to finite-lived intangible assets, $ 426 to indefinite-lived intangible assets and $ 450 to goodwill.

The majority of the goodwill is not deductible for income tax purposes.

As of December 31, 2024, the initial accounting for the acquisition has not been finalized.

The proforma effects of this acquisition for prior periods were not material to our consolidated results of operations.

On December 10, 2024, we completed our acquisition of RSV QOZB LTSS, Inc.

and certain affiliated entities (“CareBridge”), a value-based healthcare company that manages home and community-based services for Medicaid and dual-eligible members receiving long-term services and support.

This acquisition aligns with Carelon Services’ care at home strategy, and our vision to be an innovative, valuable and inclusive healthcare partner by providing care management programs that improve the lives of the people we serve.

As of December 31, 2024, the purchase price was allocated to the tangible and intangible net assets acquired based on management's initial estimates of their fair values, of which $ 995 has been allocated to finite-lived intangible assets and $ 1,631 to goodwill.

The majority of the goodwill is not deductible for income tax purposes.

As of December 31, 2024, the initial accounting for the acquisition has not been finalized.

The proforma effects of this acquisition for prior periods were not material to our consolidated results of operations.

On March 11, 2024, we completed our acquisition of Paragon Healthcare, Inc.

Paragon, which operates as part of CarelonRx, provides infusion services and injectable therapies through its omnichannel model of ambulatory infusion centers, home infusion pharmacies, and other specialty pharmacy services.

This acquisition aligns with our vision to be an innovative, valuable and inclusive healthcare partner by providing care management programs that improve the lives of the people we serve.

As of December 31, 2024, the purchase price was allocated to the tangible and intangible net assets acquired based on management's initial estimates of their fair values, of which $ 411 has been allocated to finite-lived intangible assets and $ 747 to goodwill.

The majority of the goodwill is not deductible for income tax purposes.

As of December 31, 2024, the initial accounting for the acquisition has not been finalized.

The proforma effects of this acquisition for prior periods were not

Elevance Health, Inc.

Notes to Consolidated Financial Statements (continued)

material to our consolidated results of operations.

During the year ended December 31, 2024, in total, we completed business combinations for total cash consideration of approximately $ 5,128 .

The purchase prices for all business combinations were preliminarily allocated to the tangible and intangible net assets acquired based on management's initial estimates of their fair values.

Tangible net assets acquired were $( 236 ), and intangible assets were $ 5,364 , of which $ 1,872 was allocated to finite-lived intangible assets, $ 426 to indefinite-lived intangible assets, and $ 3,066 to goodwill.

Of these amounts, $ 2,641 was allocated to our Carelon Services reportable segment, $ 1,594 was allocated to our CarelonRx reportable segment and $ 1,129 to our Health Benefits reportable segment.

The majority of goodwill is not deductible for income tax purposes.

As of December 31, 2024, the initial accounting for the acquisitions had not been finalized.

Any subsequent adjustments made to the assets acquired or liabilities assumed during the measurement period may result from a purchase price adjustment, or will be recorded as an adjustment to goodwill and/or intangible assets acquired.

The proforma effects of these acquisitions for prior periods were not material to our consolidated results of operations.

During the year ended December 31, 2023, in total, we completed business combinations for total cash consideration of approximately $ 1,655 .

These acquisitions included BioPlus Parent, LLC and its subsidiaries (“BioPlus”), which were acquired in February 2023.

The purchase prices for all business combinations were preliminarily allocated to the tangible and intangible net assets acquired based on management's initial estimates of their fair values, of which $ 820 was allocated to finite-lived intangible assets and $ 923 to goodwill.

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The majority of goodwill is not deductible for income tax purposes.

As of December 31, 2023, the initial accounting for the acquisition had not been finalized.

Any subsequent adjustments made to the assets acquired or liabilities assumed during the measurement period will be recorded as an adjustment to goodwill.

The proforma effects of this acquisition for prior periods were not material to our consolidated results of operations.

During the year ended December 31, 2022, we completed business combinations for total cash consideration of approximately $ 751 .

These acquisitions included Integra MLTC, Inc.

(“Integra”), acquired in May 2022, a managed long-term care plan serving New York state Medicaid members, enabling adults with long-term care needs and disabilities to live safely and independently in their own homes.

The purchase prices for all business combinations were allocated to the tangible and intangible net assets acquired based on management’s final estimates of their fair values, of which $ 89 was allocated to finite-lived intangible assets, $ 250 to indefinite-lived intangible assets, and $ 161 to goodwill including measurement period adjustments of $ 16 during the year ended December 31, 2023.

The intangible assets and goodwill acquired were assigned to our Health Benefits reportable segment.

The majority of goodwill is deductible for income tax purposes.

As of December 31, 2024, the accounting for the acquisitions was finalized.

The proforma effects of these acquisitions for prior periods were not material to our consolidated results of operations.

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The preliminary purchase price allocations for the various 2024 business combinations are subject to adjustment as valuation analyses, primarily related to intangible assets and contingent and tax liabilities, are finalized.

Elevance Health, Inc.

Notes to Consolidated Financial Statements (continued)

Acquisition date fair values and weighted-average useful lives assigned to intangible assets include:

Fair Value Weighted Average Useful Life Fair Value Weighted Average Useful Life

Customer-related $ 796 25 years

$ 85 10 years

Customer-related $ 1,621 20 years $ 796 25 years

Provider and hospital relationships 70 10 years — 0

Other 24 5 years

State Medicaid licenses — — 250 Indefinite

Other 181 8 years 24 5 years

State Medicaid licenses 426 — — —

Total intangible assets $ 2,298 $ 820

The results of operations and financial condition of acquired entities have been included in our consolidated results and the results of the corresponding operating segment as of the date of acquisition.

Through December 31, 2023, the impact of the acquired entities on revenue and net earnings was not material.

Unaudited pro forma revenues for the years ended December 31, 2023 and 2022 as if the acquisitions had occurred on January 1, 2022 were immaterial for both periods.

Pending Divestiture

On March 28, 2023, we announced our entrance into an agreement to sell our life and disability businesses to StanCorp Financial Group, Inc.

(“The Standard”), a provider of financial protection products and services for employers and individuals.

Upon closing, we and The Standard will enter into a product distribution partnership.

The divestiture is expected to close in the first half of 2024 and is subject to standard closing conditions and customary approvals.

The related net assets held for sale and results of operations for the life and disability businesses to be divested as of and for the year ended December 31, 2023 were not material.

Pending Acquisitions

On January 4, 2024, we announced our entrance into an agreement to acquire Paragon Healthcare, Inc., a company providing infusion services and injectable therapies through its omnichannel model of ambulatory infusion centers, home infusion pharmacies, and other specialty pharmacy services.

This acquisition aligns with our vision to be an innovative, valuable and inclusive healthcare partner by providing care management programs that improve the lives of the people we serve.

The acquisition is expected to close in the first half of 2024 and is subject to standard closing conditions and customary approvals.

On December 31, 2023, we entered into an agreement to acquire Centers Plan for Healthy Living LLC and Centers for Specialty Care Group IPA, LLC (“Centers”).

Centers is a managed long-term care plan that serves New York state Medicaid and dually-eligible Medicaid/Medicare members, enabling adults with long-term care needs and disabilities to live safely and independently in their own home.

This acquisition aligns with Elevance Health’s strategic plan to grow the Health Benefits segment and leverage industry-leading expertise while serving Medicaid and dually eligible populations.

The acquisition is expected to close in the third quarter of 2024 and is subject to standard closing conditions and customary approvals.

On January 23, 2023, we announced our entrance into an agreement to acquire Louisiana Health Service & Indemnity Company, d/b/a Blue Cross and Blue Shield of Louisiana, an independent licensee of the BCBSA that provides healthcare plans to the Individual, Employer Group, Medicaid and Medicare markets, primarily in the State of Louisiana.

This acquisition aligns with our vision to be an innovative, valuable and inclusive healthcare partner by providing care management programs that improve the lives of the people we serve.

The acquisition is subject to closing conditions and approvals.

Business Optimization Initiatives

2023-2024 Business Efficiency Program

In the third quarter of 2023, we implemented the “2023-2024 Business Efficiency Program” as a result of a strategic review of our operations, assets and investments.

The purpose of this program is to enhance operating efficiency, refine the

Through December 31, 2024, the impact of

Elevance Health, Inc.

Notes to Consolidated Financial Statements (continued)

focus of our investments and optimize our physical footprint.

This efficiency program includes the write-off of certain information technology assets and contract exit costs, a reduction in staff including the relocation of certain job functions, and the impairment of assets associated with the closure or partial closure of data centers and offices.

We anticipate substantial completion of the 2023-2024 Business Efficiency Program by the end of the third quarter of 2024.

Cash outlays associated with this program, primarily for personnel-related costs, are expected to be paid through 2024.

the acquired entities on revenue and net earnings was not material.

Unaudited pro-forma revenues for the years ended December 31, 2024, 2023 and 2022, as if the acquisitions had occurred on January 1, 2022, were immaterial.

On April 1, 2024, we completed the sale of our life and disability businesses to StanCorp Financial Group, Inc.

(“The Standard”), a provider of financial protection products and services for employers and individuals, which resulted in a gain on sale of business of $ 201 in the year ended December 31, 2024.

Upon closing, we and The Standard entered into a product distribution partnership.

The related net assets held for sale for the life and disability businesses divested as of December 31, 2023 and results of operations for the year ended December 31, 2024 were not material.

Business Optimization Initiatives

2023-2024 Business Efficiency Program

During the third quarter of 2023, based on a strategic review of our operations, assets and investments, management implemented the “2023-2024 Business Efficiency Program” to enhance operating efficiency, refine the focus of our investments and optimize our physical footprint.

The 2023-2024 Business Efficiency Program included the write-off of certain information technology assets and contract exit costs, a reduction in staff including the relocation of certain job functions, and the impairment of assets associated with the closure or partial closure of data centers and offices.

The 2023-2024 Business Efficiency Program was finalized as of December 31, 2024.

Cash outlays associated with this program, which primarily relate to the personnel-related costs, are expected to be paid through 2025.

In 2024, we incurred $ 268 of costs towards the 2023-2024 Business Efficiency Program.

This included primarily $ 72 of pre-tax charges for information technology asset write-offs, $ 165 of pre-tax personnel-related charges for the reduction and/or relocation of staff, which includes severance and related costs primarily determined under our existing severance plans, and $ 31 of pre-tax charges from asset impairments related to the closure or partial closure of offices, including operating lease-related ROU assets and other property and equipment.

In 2023, we incurred $ 752 of expense, which included $ 468 of pre-tax charges for information technology assets and contract write-offs related to projects that have been de-prioritized and stopped, $ 230 of pre-tax personnel-related charges for the reduction and/or relocation of workforce, which includes severance and related costs primarily determined under our existing severance plans, and $ 54 of pre-tax charges from asset impairments related to the closure or partial closure of data centers and offices, including operating lease-related ROU assets and other property and equipment.

These charges were recognized in operating expense in the Corporate & Other segment;

These charges in both years were recognized in operating expense in the Corporate & Other segment;

see Note 20, “Segment Information.”

2020 Business Optimization Program

During 2020, our management introduced initiatives across the enterprise to optimize our business operations, including recognition of liabilities for future payments for employee termination costs in connection with the repositioning and reskilling of our workforce.

During 2021, we identified reductions of office space and recorded a charge of $ 202 in operating expense related to this optimization program.

This charge included $ 136 for impairment and abandonment of operating-lease related ROU assets and $ 66 for impairment and abandonment of property and equipment.

The charges recognized in the Health Benefits, CarelonRx, Carelon Services and Corporate & Other segments in 2021, were $ 168 , $ 1 , $ 33 and $ 0 , respectively.

During 2022, while evaluating our real estate strategy as it relates to the changing needs of a more hybrid remote workforce, we identified additional reductions of office space and recorded a net charge of $ 39 in operating expense related to this optimization program.

This charge included $ 34 for impairment and abandonment of operating-lease related ROU assets and $ 7 for impairment and abandonment of property and equipment.

In addition, we released $ 2 of employee termination costs.

The net charges (benefits) recognized in the Health Benefits, CarelonRx, Carelon Services and Corporate & Other segments in 2022, were $ 36 , $ 0 , $ 5 and $( 2 ), respectively.

During 2023, we released $ 33 of employee termination costs related to this optimization program, as reflected in the table below, which was recognized in the Health Benefits segment.

Liabilities for Employee Termination Costs

A summary of the activity for the year ended December 31, 2023 and the ending balance at that date, related to the liability for employee termination costs, is as follows:

Health Benefits CarelonRx Carelon Services Corporate & Other Total

2023-2024 Business Efficiency Program

Liabilities for employee termination costs at January 1, 2023

$ — $ — $ — $ — $ —

— — — 230 230

— — — ( 39 ) ( 39 )

Total liabilities for employee termination costs ending balance at December 31, 2023

$ — $ — $ — $ 191 $ 191

During the year ended December 31, 2024, there were $ 165 in charges related to employee termination costs under the 2023-2024 Business Efficiency Program, and payments were $ 132 .

During the year ended December 31, 2023, there were $ 230 in charges related to employee termination costs under the 2023-2024 Business Efficiency Program, and payments were $ 39 .

Elevance Health, Inc.

Notes to Consolidated Financial Statements (continued)

Health Benefits CarelonRx Carelon Services Corporate & Other Total

2020 Business Optimization Initiatives

Liabilities for employee termination costs at January 1, 2023

$ 80 $ 1 $ — $ — $ 81

Payments ( 39 ) ( 1 ) — — ( 40 )

Releases ( 33 ) — — — ( 33 )

Total liabilities for employee termination costs ending balance at December 31, 2023

$ 8 $ — $ — $ — $ 8

A summary of current and long-term fixed maturity securities, available-for-sale, at December 31, 2024 and 2023 is as follows:

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Total $ 1,192 $ 229

Other Invested Assets

Other invested assets include non-controlled joint ventures, including our minority interest ownership of approximately 35 % of Augusta Topco Holdings, L.P.

(“Mosaic Health”) and our 40 % minority interest ownership of Project Freedom Holdings, LLC, which is the ultimate parent of LIBERTY Dental Plan Corporation (“Liberty Dental”).

On August 6, 2024, we made an equity investment in Mosaic Health of $ 2,580 , consisting of cash and the net put option discussed in Note 6 “Derivative Financial Instruments”, Mosaic Health is a joint venture with Clayton, Dubilier & Rice (“CD&R”) that is designed to accelerate innovation in care delivery across multiple regions in the United States by bringing together certain care delivery and enablement assets of Carelon Management Services, LLC (“CMSI Assets”), a Carelon Health business, and two CD&R portfolio businesses, apree health and Millennium Physician Group.

The investment is accounted for as an equity method investment.

Our additional contribution of the CMSI Assets to Mosaic Health was completed on January 1, 2025, for which we received an additional $ 300 of equity (approximately 5 % ownership) in Mosaic Health.

The CMSI Assets are included under the captions “Assets held for sale” and “Liabilities held for sale” in our consolidated balance sheets as of December 31, 2024.

In connection with our equity method investment in Mosaic Health, we entered into a financing agreement to provide a term loan of $ 200 and a line of credit up to $ 500 to Mosaic Health.

Net amounts receivable under these arrangements were $ 188 at December 31, 2024, which is included under the caption “Other invested assets” in our consolidated balance sheets as of December 31, 2024.

During the year ended December 31, 2024, we recognized $ 7 in interest income from the financing arrangement with Mosaic Health.

In addition to the term loan and line of credit, we committed to providing $ 70 of funding with no additional equity interest in Mosaic Health to meet any shortfall in operating cash flow and regulatory capital requirements of the CMSI Assets through December 31, 2026, and to fund any remaining shortfalls as necessary for which we would receive additional equity interests in Mosaic Health.

Elevance Health, Inc.

Notes to Consolidated Financial Statements (continued)

In January 2023, we made an equity investment in Liberty Dental, a joint venture with Welsh, Carson, Anderson & Stowe which engages in dental insurance and dental health care administration.

The investment is accounted for as an equity method investment.

In connection with our equity method investment in Liberty Dental, in December 2024 we entered into a commitment to provide funding in the form of mandatorily redeemable preferred equity shares in Liberty Dental of up to $ 250 of which $ 87 was disbursed in 2024.

The mandatorily redeemable preferred equity in Liberty Dental is included in the caption “Other invested assets” in our consolidated balance sheets at December 31, 2024.

Dividend income recognized from the financing arrangement during the year ended December 31, 2024 was not material.

Investment Income

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Net investment income $ 2,051 $ 1,825 $ 1,485

Elevance Health, Inc.

Notes to Consolidated Financial Statements (continued)

Investment (Losses) Gains

5 unchanged sentences

Gross realized losses from sales ( 479 ) ( 488 ) ( 469 )

Impairment (losses) recoveries recognized in income ( 15 ) ( 31 ) 1

Net realized gains on fixed maturity securities ( 456 ) ( 448 ) 127

Impairment losses recognized in income

( 17 ) ( 15 ) ( 31 )

Net realized losses on fixed maturity securities

( 338 ) ( 456 ) ( 448 )

Equity securities:

Unrealized (losses) gains recognized on equity securities still held ( 1 ) ( 78 ) 2

Unrealized losses recognized on equity securities still held

( 6 ) ( 1 ) ( 78 )

Net realized (losses) gains recognized on equity securities sold ( 9 ) 6 ( 102 )

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Impairment losses recognized in income ( 126 ) ( 291 ) ( 34 )

Net (losses) gains on other investments ( 251 ) ( 2 ) 255

Net (losses) gains on investments $ ( 702 ) $ ( 630 ) $ 311

Net losses on other investments

( 102 ) ( 251 ) ( 2 )

Net losses on investments

$ ( 455 ) $ ( 702 ) $ ( 630 )

A primary objective in the management of our fixed maturity and equity portfolios is to maximize total return relative to underlying liabilities and respective liquidity needs.

1 unchanged sentence

Sales will generally produce realized gains and losses.

In the ordinary course of business, we may sell securities at a loss for a number of reasons, including, but not limited to:

In the ordinary course of business, we may sell securities at a loss for a number of reasons, including, but not limited

Elevance Health, Inc.

Notes to Consolidated Financial Statements (continued)

(i) changes in the investment environment;

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or (v) changes in expected cash flow.

Total proceeds from sales, maturities, calls or redemptions of fixed maturity securities was $ 12,289 , $ 22,048 and $ 10,565 for the years ended December 31, 2023, 2022 and 2021, respectively.

Total proceeds from sales, maturities, calls or redemptions of fixed maturity securities were $ 16,334 , $ 12,289 and $ 22,048 for the years ended December 31, 2024, 2023 and 2022, respectively.

A significant judgment in the valuation of investments is the determination of when a credit loss has occurred.

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Due to the level of risk associated with certain investment securities and the level of uncertainty related to changes in the value of investment securities, it is possible that changes in these risk factors in the near term could have a material adverse impact on our results of operations or shareholders’ equity.

Elevance Health, Inc.

Notes to Consolidated Financial Statements (continued)

At December 31, 2024 and 2023, there were no individual investments that exceeded 10% of shareholders’ equity.

At December 31, 2023 and 2022, there were eleven and eight respectively, fixed maturity investments that did not produce income during the years then ended.

As of December 31, 2023 and 2022, we had committed approximately $ 1,321 and $ 1,504 , respectively, to future capital calls from various third-party investments in exchange for an ownership interest in the related entities.

At December 31, 2024 and 2023, there were nine and eleven , respectively, fixed maturity investments that did not produce income during the years then ended.

We had unfunded loan commitments to certain equity investees of $ 1,442 and $ 1,321 at December 31, 2024 and 2023, respectively.

We do not believe such obligations will materially affect its financial position, results of operations, or cash flows.

As of December 31, 2024 and 2023, we had committed approximately $ 423 and $ 497 , respectively, to future investments in rated notes.

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We recognize the collateral as an asset under the caption “Other current assets” in our consolidated balance sheets, and we recognize a corresponding liability for the obligation to return the collateral to the borrower under the caption “Other current liabilities.” The securities on loan are reported in the applicable investment category on our consolidated balance sheets.

At December 31, 2023 and 2022, the remaining contractual maturities of our securities lending transactions included overnight and continuous transactions of cash for $ 2,255 and $ 2,221 , respectively, United States Government securities for $ 99 and $ 224 , respectively, and residential mortgage-backed securities for $ 26 and $ 12 , respectively.

Elevance Health, Inc.

Notes to Consolidated Financial Statements (continued)

At December 31, 2024 and 2023, the remaining contractual maturities of our securities lending transactions included overnight and continuous transactions of cash for $ 2,115 and $ 2,255 , respectively, United States Government securities for $ 176 and $ 99 , respectively, and residential mortgage-backed securities for $ 14 and $ 26 , respectively.

Derivative Financial Instruments

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We also enter into master netting agreements which reduce credit risk by permitting net settlement of transactions.

At December 31, 2023 and 2022, we had received collateral of $ 35 and $ 57 , respectively, related to our derivative financial instruments.

A summary of the aggregate contractual or notional amounts and estimated fair values related to derivative financial instruments at December 31, 2023 and 2022 is as follows:

Amount Balance Sheet Location Estimated Fair Value

At December 31, 2024 and 2023, we had posted collateral of $ 142 and $ 35 , respectively, related to our derivative financial instruments.

Elevance Health, Inc.

Notes to Consolidated Financial Statements (continued)

A summary of the aggregate contractual or notional amounts and carrying values related to derivative financial instruments at December 31, 2024 and 2023 is as follows:

Amount Balance Sheet Location Carrying Value

Asset (Liability)

2 unchanged sentences

Interest rate swaps - fixed to floating $ 6,475 Other assets/other liabilities $ 8 $ ( 150 )

Foreign currency forwards

322 Other liabilities

Subtotal hedging

6,797 8 ( 156 )

Non-hedging instruments

Derivatives embedded in convertible securities

15 Fixed maturity securities

Interest rate swaps 5 Equity securities/other assets/other liabilities — —

Options 161 Other assets/other liabilities — ( 85 )

Collars 19 Equity securities 14 ( 3 )

Interest rate swaps 5 — —

Options 2,453 Other liabilities

Futures/Forwards

151 Equity securities/other assets/other liabilities

124 Equity securities/other assets

Subtotal non-hedging 2,582 Subtotal non-hedging 3 ( 1,415 )

8 unchanged sentences

15 Fixed maturity securities

Interest rate swaps 5 Equity securities/other assets/other liabilities — —

Options — Other assets/other liabilities 1 —

Interest rate swaps 5 — —

Options 161 Other liabilities

Collars 19 Equity securities 14 ( 3 )

Futures/Forwards

358 Equity securities/other assets/other liabilities

151 Equity securities/other assets

Subtotal non-hedging 351 Subtotal non-hedging 22 ( 88 )

12 unchanged sentences

Interest rate swap 2024 $ 200 $ — 5.500 % April 15, 2032

Interest rate swap 2024 1,000 — 4.750 August 15, 2032

Interest rate swap 2024 600 — 5.150 December 15, 2028

Interest rate swap 2024 1,000 — 5.375 December 15, 2033

Interest rate swap 2024 750 — 4.750 August 15, 2029

Interest rate swap 2024 750 — 4.950 May 1, 2031

Interest rate swap 2024 1,200 — 5.200 August 15, 2034

Interest rate swap 2023 300 300 5.000 April 15, 2032

Interest rate swap 2023 150 150 2.550 September 15, 2030

2 unchanged sentences

Interest rate swap 2023 100 100 2.250 November 15, 2029

Interest rate swap

2022 150 150 5.500 April 15, 2032

Interest rate swap

2022 75 75 4.101 September 1, 2027

Interest rate swap

2022 75 75 2.250 November 15, 2029

Interest rate swap 2022 150 150 5.500 April 15, 2032

Interest rate swap 2022 75 75 4.101 September 1, 2027

Interest rate swap 2022 75 75 2.250 November 15, 2029

Interest rate swap 2020 — 75 4.101 September 1, 2027

Interest rate swap

2018 — 50 4.101 September 1, 2027

Interest rate swap

2018 — 450 3.300 January 15, 2023

Total notional amount outstanding

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Year ended December 31, 2024

Derivatives embedded in convertible securities Net (losses) gains on financial instruments $ ( 2 )

Options (including swaptions) Net (losses) gains on financial instruments 3

Collars Net (losses) gains on financial instruments ( 3 )

Futures Net (losses) gains on financial instruments 10

Options (including swaptions) Net losses on financial instruments

Collars Net losses on financial instruments

Futures Net losses on financial instruments

Year ended December 31, 2023

Derivatives embedded in convertible securities Net (losses) gains on financial instruments $ ( 3 )

Interest rate swaps Net (losses) gains on financial instruments ( 4 )

Options (including swaptions) Net (losses) gains on financial instruments 13

Collars Net (losses) gains on financial instruments 10

Futures Net (losses) gains on financial instruments 64

Derivatives embedded in convertible securities Net losses on financial instruments

Options (including swaptions) Net losses on financial instruments

Collars Net losses on financial instruments

Futures Net losses on financial instruments

Year ended December 31, 2022

Interest rate swaps Net (losses) gains on financial instruments $ ( 4 )

Options Net (losses) gains on financial instruments 4

Futures Net (losses) gains on financial instruments 7

In January 2023, we made an equity investment that resulted in our minority interest ownership of Project Freedom Holdings, LLC, which is the ultimate parent of LIBERTY Dental Plan Corporation (“Liberty Dental”).

Liberty Dental engages in dental insurance and dental health care administration.

Derivatives embedded in convertible securities Net losses on financial instruments

Interest rate swaps Net losses on financial instruments

Options (including swaptions) Net losses on financial instruments

Collars Net losses on financial instruments

In connection with our equity investment in Mosaic Health (see Note 5, “Investments”), we entered into a limited partnership and related agreements with the majority owners that provides for certain rights and obligations of each party, including certain put, call, and purchase price true-up options.

These options, if exercised, will result in our purchase of the units held by the majority owners as early as 2028 but no later than 2030 at a price based on certain multiples of revenue and earnings of Mosaic Health businesses, subject to various adjustments and qualifications.

We have calculated the fair value of the net put option, which is a Level III measurement (see Note 7, “Fair Value”), using a Monte Carlo simulation, which relies on assumptions including cash flow projections, risk-free rates, volatility and details specific to the options.

Significant changes in assumptions could result in significantly lower or higher fair value measurements.

The net put option’s fair value liability of $ 1,330 , which is a non-cash item measured at the date of our initial investment, is included under the caption “Other noncurrent liabilities” in our consolidated balance sheets as of December 31, 2024.

We have elected to not mark the net put option to market, as it is an option on large blocks of equity securities, and the carrying value of the net put option will remain on the consolidated balance sheets until it is exercised or expires.

As discussed in Note 5, “Investments,” in January 2023, we made an equity investment that resulted in our minority interest ownership of Liberty Dental.

As part of the Liberty Dental transaction, we entered into a shareholders’ agreement with the majority owners that provides for certain rights and obligations of each party, including certain put and call options.

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Significant changes in assumptions could result in significantly lower or higher fair value measurements.

The net put option’s fair value liability of $ 85 , measured at the date of acquisition, is included in “Other noncurrent liabilities.” We have elected to not mark the net put option to market, and the fair value of the net put option will remain on the balance sheet until it's exercised or expires.

The net put option’s fair value liability of $ 85 determined as of December 31, 2023 is included under the caption “Other noncurrent liabilities” in our consolidated balance sheets as of December 31, 2024 and 2023.

We have elected to not mark the net put option to market, and the carrying value of the net put option will remain on the consolidated balance sheets until it is exercised or expires.

Elevance Health, Inc.

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Total liabilities $ — $ ( 40 ) $ — $ ( 40 )

A reconciliation of the beginning and ending balances of assets measured at fair value on a recurring basis using Level III inputs for the years ended December 31, 2024, 2023 and 2022 is as follows:

Elevance Health, Inc.

Notes to Consolidated Financial Statements (continued)

A reconciliation of the beginning and ending balances of assets measured at fair value on a recurring basis using Level III inputs for the years ended December 31, 2023, 2022 and 2021 is as follows:

Securities Residential

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that is, the instruments are not measured at fair value on an ongoing basis but are subject to fair value adjustments only in certain circumstances.

As disclosed in Note 3, “Business Acquisitions and Divestitures,” we completed our acquisition of BioPlus in 2023 and our acquisition of Integra

As disclosed in Note 3, “Business Acquisitions and Divestitures,” we completed our acquisitions of Centers, CareBridge and Paragon in 2024 and BioPlus in 2023.

The net assets acquired in these acquisitions and resulting goodwill and other intangible assets were recorded at fair value primarily using Level III inputs.

The majority of assets acquired and liabilities assumed were recorded at their carrying values as of the respective date of acquisition, as their carrying values approximated their fair values due to

Elevance Health, Inc.

Notes to Consolidated Financial Statements (continued)

The net assets acquired in these acquisitions and resulting goodwill and other intangible assets were recorded at fair value primarily using Level III inputs.

The majority of assets acquired and liabilities assumed were recorded at their carrying values as of the respective date of acquisition, as their carrying values approximated their fair values due to their short-term nature.

The fair values of goodwill and other intangible assets acquired in our acquisitions of BioPlus and Integra were estimated based on the income approach.

their short-term nature.

The fair values of goodwill and other intangible assets acquired in our acquisitions of Centers, CareBridge, Paragon and BioPlus were estimated based on the income approach.

The income approach estimates fair value based on the present value of the cash flows that the assets could be expected to generate in the future.

We developed internal estimates for the expected cash flows and discount rate in the present value calculation.

Also in 2023, we entered into a shareholders’ agreement which included certain put and call options associated with our minority interest ownership of Liberty Dental.

The resulting net put option liability was recorded at its fair value measured at the date of acquisition using Level III inputs with an election not to mark the derivative to market, which is further discussed and disclosed in Note 6, “Derivatives”.

Other than the assets acquired and liabilities assumed in our acquisitions of BioPlus and Integra and the net put option on Liberty Dental described above, there were no material assets or liabilities measured at fair value on a nonrecurring basis during the years ended December 31, 2023 or 2022.

Also, we entered into agreements which included certain put and call options associated with our minority interest ownership of Mosaic Health in 2024 and Liberty Dental in 2023.

The resulting net put option liabilities were recorded at their fair values measured at the dates of acquisition using Level III inputs with an election not to mark the derivative to market, which is further discussed and disclosed in Note 6, “Derivatives”.

The net put option carrying value for Mosaic Health was $ 1,330 at December 31, 2024.

The net put option fair value for Liberty Dental was $ 543 and $ 85 at December 31, 2024 and 2023, respectively.

Other than the assets acquired and liabilities assumed in our acquisitions of CareBridge, Centers, Paragon and BioPlus and the net put options on Mosaic Health and Liberty Dental described above, there were no material assets or liabilities measured at fair value on a nonrecurring basis during the years ended December 31, 2024 or 2023.

Our valuation policy is determined by members of our treasury and accounting departments.

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

Non-financial instruments such as property and equipment, other current assets, deferred income taxes, intangible assets and certain financial instruments, such as policy liabilities, are excluded from the fair value disclosures.

Non-financial instruments such as property and equipment, other current assets, deferred income taxes, intangible assets and certain financial instruments, such as limited partnerships, joint ventures, other non-controlled corporations, corporate-owned life insurance policies, and policy liabilities, are excluded from the fair value disclosures.

Therefore, the fair value amounts cannot be aggregated to determine our underlying economic value.

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Other invested assets :

Other invested assets primarily include our investments in limited partnerships, joint ventures and other non-controlled corporations and mortgage loans, as well as the cash surrender value of corporate-owned life insurance policies.

Investments in limited partnerships, joint ventures and other non-controlled corporations are carried at our share in the entities’ undistributed earnings, which approximates fair value.

Other invested assets primarily include our mortgage loans and notes receivables.

Mortgage loans are carried at amortized cost net of loss allowance.

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Treasury yield plus a market rate spread.

The carrying value of corporate-owned life insurance policies represents the cash surrender value as reported by the respective insurer, which approximates fair value.

The notes receivables are measured at their amortized cost.

The fair value of notes receivables is the present value of discounted future cash flows.

Elevance Health, Inc.

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

Long-term debt—commercial paper :

The carrying amount for commercial paper approximates fair value, as the underlying instruments have variable interest rates at market value.

Long-term debt—senior unsecured notes and surplus notes :

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

Long-term debt—convertible debentures :

The fair value of our convertible debentures was based on the quoted market price in the active private market in which the convertible debentures traded.

The options consist of put, call and purchase price true-up options associated with our equity investment in the Mosaic Health joint venture and the put and call options associated with our equity investment in Liberty Dental.

The fair value of the net put option associated with Mosaic Health is based on a Monte Carlo simulation, which relies on assumptions including cash flow projections, risk-free rates, volatility and details specific to the options.

The fair value of the net put option associated with Liberty Dental is based on the discounted present value of estimated future option exercise prices.

A summary of the estimated fair values by level of each class of financial instrument that is recorded at its carrying value on our consolidated balance sheets at December 31, 2024 and 2023 is as follows:

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Notes 30,867 — 28,460 — 28,460

1,415 — — 1,873 1,873

December 31, 2023

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Notes 24,895 — 23,569 — 23,569

Convertible debentures 63 — 463 — 463

Elevance Health, Inc.

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Federal and state carryforwards

Investment basis 31 340

Foreign (including Puerto Rico) carryforwards 90 87

Other 100 166

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Total deferred income tax assets 2,117 1,886

Deferred income tax liabilities:

federal and state intangible assets 2,584 2,043

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Depreciation and amortization 38 81

Investment basis 11 11

Retirement assets 330 319

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We recognized $ 206 and $ 228 of deferred tax asset under the caption “Other noncurrent assets” at December 31, 2024 and 2023, respectively.

We recognized $ 1,970 and $ 2,015 of deferred tax liability under the caption “Deferred tax liabilities, net” at December 31, 2023 and 2022.

We recognized $ 2,148 and $ 1,970 of deferred tax liability under the caption “Deferred tax liabilities, net” at December 31, 2024 and 2023, respectively.

As of December 31, 2024, we have established U.S.

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subsidiaries, which are included in the Investment basis component above, consistent with prior years.

Elevance Health, Inc.

Notes to Consolidated Financial Statements (continued)

Significant components of the provision for income taxes for the years ended December 31, 2024, 2023 and 2022 consist of the following:

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Total current tax expense 2,294 2,414 1,797

Deferred tax expense (benefit) ( 690 ) ( 85 ) 166

Deferred tax benefit

( 361 ) ( 690 ) ( 85 )

Total income tax expense $ 1,933 $ 1,724 $ 1,712

Elevance Health, Inc.

Notes to Consolidated Financial Statements (continued)

State and local current tax expense is reported gross of federal benefit in the preceding table, and includes amounts related to audit settlements, uncertain tax positions, state tax credits and true up of prior years’ tax.

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During the year ended December 31, 2024, we recognized income tax expense of $ 1,933 , or $ 8.30 per diluted share.

The decrease in effective income tax rate for 2023 compared to 2022 was primarily due to the impact of geographic changes in the mix of 2023 earnings.

The increase in effective income tax rate for 2024 compared to 2023 was primarily due to the impact of geographic changes in the mix of 2024 earnings.

During the year ended December 31, 2023, we recognized income tax expense of $ 1,724 , or $ 7.26 per diluted share.

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Balance at December 31 $ 775 $ 468

Elevance Health, Inc.

Notes to Consolidated Financial Statements (continued)

The table above excludes interest, net of related tax benefits, which is treated as income tax expense (benefit) under our accounting policy.

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We had accrued approximately $ 165 and $ 79 for the payment of interest at December 31, 2024 and 2023, respectively.

For the years ended December 31, 2024, 2023 and 2022 we recognized net penalty expense of $ 7 , $ 17 and $ 0 , respectively.

We had accrued approximately $ 85 and $ 60 for the payment of penalties at December 31, 2024 and 2023, respectively.

As of December 31, 2024, as further described below, certain tax years remain open to examination by the Internal Revenue Service (“IRS”) and various state, local and foreign authorities.

As a result of these examinations and discussions

Elevance Health, Inc.

Notes to Consolidated Financial Statements (continued)

with taxing agencies, we have recorded amounts for uncertain tax positions.

As a result of these examinations and discussions with taxing agencies, we have recorded amounts for uncertain tax positions.

It is anticipated that the amount of unrecognized tax benefits will change in the next twelve months due to possible settlements of audits and changes in temporary items.

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At December 31, 2024, we had federal net operating loss carryforwards of $ 54 , of which $ 33 will expire beginning 2032 through 2044 and $ 21 have an indefinite carryforward period.

State and foreign net operating loss carryforwards expire beginning 2024 through 2042, with some having an indefinite carryforward period.

State and local net operating loss carryforwards of $ 256 , of which $ 194 will expire beginning 2025 through 2044, and $ 62 have an indefinite carryforward period.

Foreign net operating loss carryforward of $ 90 will expire beginning 2033.

Income taxes receivable totaled $ 138 and $ 543 at December 31, 2024 and 2023, respectively.

We recognize the income tax receivable as an asset under the caption “Other current assets” in our consolidated balance sheets.

We recognized the income tax receivable of $ 213 and $ 543 as an asset under the caption “Other current assets” and the income tax payable of $ 75 and $ 0 as a liability under the caption “Other current liabilities” in our consolidated balance sheets as of December 31, 2024 and December 31, 2023, respectively.

During 2024, 2023 and 2022, federal income taxes paid totaled $ 1,303 , $ 1,936 and $ 1,594 , respectively.

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Property and equipment, net $ 4,652 $ 4,359

Elevance Health, Inc.

Notes to Consolidated Financial Statements (continued)

Depreciation expense for 2024, 2023 and 2022 was $ 105 , $ 107 and $ 123 , respectively.

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Capitalized costs related to the internal development of software of $ 6,363 and $ 5,870 at December 31, 2024 and 2023, respectively, are reported with computer software.

Impairment of property and equipment for the years ended December 31, 2023, 2022 and 2021 was $ 446 , $ 7 , and $ 73 , respectively, which is included in operating expense and primarily related to our activities disclosed in Note 4, “Business Optimization Initiatives.”

Elevance Health, Inc.

Notes to Consolidated Financial Statements (continued)

Impairment of property and equipment for the years ended December 31, 2024, 2023 and 2022 was $ 72 , $ 446 , and $ 7 , respectively, which is included in Operating expenses and primarily related to our activities disclosed in Note 4, “Business Optimization Initiatives.”

Goodwill and Other Intangible Assets

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FASB guidance also requires interim impairment testing to be performed when potential impairment indicators exist.

These tests involve the use of estimates related to the fair value of goodwill and intangible assets with indefinite lives and require a significant degree of management judgment and the use of subjective assumptions.

These tests involve the use of estimates related to the estimated fair value of goodwill and intangible assets with indefinite lives and require a significant degree of management judgment and the use of subjective assumptions.

Qualitative testing procedures include assessing our financial performance, macroeconomic conditions, industry and market considerations, various asset specific factors and entity specific events.

For quantitative testing, the fair values are estimated using the projected income and market valuation approaches, incorporating Level III internal estimates for inputs, including, but not limited to, revenue projections, income projections, cash flows and discount rates.

In 2024, we incurred goodwill impairment losses of $ 106 in our Carelon Services reporting segment specific to the fair valuation of the CMSI assets included in assets and liabilities held for sale as discussed in Note 5, “Investments.” Otherwise, the estimated fair values of our reporting units were substantially in excess of their carrying values.

We did not incur any impairment losses in 2023 or 2022, as the estimated fair values of our reporting units were substantially in excess of their carrying values.

Elevance Health, Inc.

Notes to Consolidated Financial Statements (continued)

The components of other intangible assets as of December 31, 2024 and 2023 are as follows:

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Other intangible assets $ 16,559 $ ( 4,465 ) $ 12,094 $ 14,298 $ ( 4,025 ) $ 10,273

In 2023, additions to the gross carrying amount of customer relationships relate to the acquisition of BioPlus.

The decrease in the gross and net carrying amount of intangible assets with finite lives—other primarily related to the accelerated amortization of certain trade names in connection with the new branding strategy, which was substantially completed in 2023.

Intangible assets, along with the related accumulated amortization, are removed from the table above at the end of the fiscal year in which they become fully amortized.

In 2024, additions to the gross carrying amount of customer relationships primarily relate to the acquisitions of Centers, CareBridge and Paragon.

Intangible assets with finite lives, along with the related accumulated amortization, are removed from the table above at the end of the fiscal year in which they become fully amortized.

As of December 31, 2024, the estimated amortization expense for each of the five succeeding years is as follows:

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and 2029, $ 317 .

Elevance Health, Inc.

Notes to Consolidated Financial Statements (continued)

Retirement Benefits

We sponsor various non-contributory employee defined benefit plans through certain subsidiaries.

The Elevance Health Cash Balance Plan A and the Elevance Health Cash Balance Plan B are cash balance pension plans covering certain eligible employees of the affiliated companies that participate in these plans.

Effective January 1, 2006, benefits were curtailed, with the result that most participants stopped accruing benefits but continue to earn interest on benefits accrued prior to the curtailment.

Certain participants subject to collective bargaining and certain other participants who met grandfathering rules continued to accrue benefits.

Participants who did not receive credits and/or benefit accruals were included in the Elevance Health Cash Balance Plan A, while employees who were still receiving credits and/or benefits participated in the Elevance Health Cash Balance Plan B.

Effective January 1, 2019, benefits under the Elevance Health Cash Balance Plan B were curtailed.

All grandfathered participants no longer have pay credits added to their accounts but continue to earn interest on existing account balances.

Participants continue to earn years of pension service for vesting purposes.

Several pension plans acquired through various corporate mergers and acquisitions were merged into these plans in prior years.

The Employees’ Retirement Plan of Blue Cross of California (the “BCC Plan”) is a defined benefit pension plan that covers eligible employees of Blue Cross of California who are covered by a collective bargaining agreement.

Effective January 1, 2007, benefits were curtailed under the BCC Plan with the result that no Blue Cross of California employees hired or rehired after December 31, 2006 are eligible to participate in the BCC Plan.

All of the plans’ assets consist primarily of equity securities, fixed maturity securities, investment funds and cash.

The funding policies for all plans are to contribute amounts at least sufficient to meet the minimum funding requirements set forth in the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), as further amended by the Pension Protection Act of 2006, and in accordance with income tax regulations, plus such additional amounts as are necessary to provide assets sufficient to meet the benefits to be paid to plan participants.

The following tables disclose consolidated “pension benefits,” which include the defined benefit pension plans described above, and consolidated “other benefits,” which include postretirement health and welfare benefits including medical, vision and dental benefits offered to certain employees.

Calculations were computed using assumptions at the December 31 measurement dates.

The reconciliation of the benefit obligation is as follows:

Future benefit accruals for these plans are frozen, but participants continue to earn interest on existing account balances.

We also have a post-retirement health and welfare plan that primarily provides healthcare benefits to certain eligible employees.

The majority of the pension and post-retirement plans are over funded.

We fund our qualified pension plans at least sufficient to meet minimum amounts required by law.

Pension and post-retirement healthcare plan expenses and valuations are dependent on assumptions used by third-party actuaries in calculating those amounts.

These assumptions include discount rates, healthcare cost trends, long-term return on plan assets, retirement rates, mortality rates and other factors.

The reconciliation of the benefit obligations for the plans is as follows:

Pension Benefits Other Benefits

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Fair value of plan assets at end of year $ 1,764 $ 1,807 $ 325 $ 313

The net amount included in the consolidated balance sheets is as follows:

The amounts included in the consolidated balance sheets are as follows:

Pension Benefits Other Benefits

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Noncurrent liabilities ( 34 ) ( 38 ) — —

Net amount at December 31 $ 414 $ 319 $ 58 $ 22

The net amounts included in accumulated other comprehensive income (loss) that have not been recognized as components of net periodic benefit costs are as follows:

Pension Benefits Other Benefits

Net amount at end of year

$ 501 $ 414 $ 87 $ 58

Net actuarial (loss) gain $ ( 625 ) $ ( 672 ) $ 38 $ 5

Prior service credit — — 2 3

Net amount before tax at December 31 $ ( 625 ) $ ( 672 ) $ 40 $ 8

The accumulated benefit obligation for the defined benefit pension plans was $ 1,391 and $ 1,413 at December 31, 2023 and 2022, respectively.

As of December 31, 2023, certain pension plans had accumulated benefit obligations in excess of plan assets.

Such plans had accumulated benefit obligation and fair value of plan assets of $ 44 and $ 0 , respectively.

In addition, certain plans had projected benefit obligations in excess of plan assets.

Such plans had projected benefit obligation and fair value of plan assets of $ 44 and $ 0 , respectively.

The weighted-average assumptions used in calculating the benefit obligations for all plans are as follows:

Pension Benefits Other Benefits

Our estimated future payments for pension benefits and other benefits are as follows:

Benefits Other

2025 $ 128 $ 26

Discount rate 4.91 % 5.18 % 4.83 % 5.12 %

Rate of compensation increase 3.00 % 3.00 % 3.00 % 3.00 %

Expected rate of return on plan assets 6.47 % 6.58 % 6.64 % 6.57 %

Interest crediting rate 4.50 % 4.25 % 4.50 % 3.89 %

2030 - 2034 472 99

Elevance Health, Inc.

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Other Benefits

Service cost $ — $ — $ 1

Interest Cost

$ 12 $ 14 $ 7

Expected return on assets

( 22 ) ( 21 ) ( 26 )

Amortization of prior service credit

( 1 ) ( 2 ) ( 4 )

Recognized actuarial gain

Net periodic benefit credit $ ( 12 ) $ ( 9 ) $ ( 23 )

During the years ended December 31, 2023, 2022 and 2021, we incurred total settlement losses of $ 7 , $ 28 and $ 26 , respectively, as lump-sum payments exceeded the service cost and interest cost components of net periodic benefit cost for certain of our plans.

The weighted-average assumptions used in calculating the net periodic benefit cost for all plans are as follows:

The net amounts included in accumulated other comprehensive income (loss) that have not been recognized as components of net periodic benefit costs are as follows:

Pension Benefits Other Benefits

2024 2023 2024 2023

Net actuarial gain (loss)

$ ( 580 ) $ ( 625 ) $ 55 $ 38

Prior service credit — — — 2

Net amount before tax at end of year

$ ( 580 ) $ ( 625 ) $ 55 $ 40

The pre-tax amounts recognized in other comprehensive loss are as follows:

2024 2023 2022

Pension Benefits

Net actuarial gain (loss)

$ 25 $ 31 $ ( 91 )

Recognized actuarial loss

Settlement loss

Total pre-tax other comprehensive income (loss)

$ 45 $ 47 $ ( 47 )

Other Benefits

Net actuarial gain (loss)

$ 17 $ 34 $ ( 32 )

Recognized actuarial gain

Prior service credit

( 1 ) ( 2 ) ( 5 )

Total pre-tax other comprehensive income (loss)

$ 15 $ 32 $ ( 37 )

The accumulated benefit obligation for the defined benefit pension plans was $ 1,262 and $ 1,391 at December 31, 2024 and 2023, respectively.

As of December 31, 2024, certain pension plans had accumulated benefit obligations in excess of plan assets.

Such plans had accumulated benefit obligation and fair value of plan assets of $ 38 and $ 0 , respectively.

In addition, certain plans had projected benefit obligations in excess of plan assets.

Such plans had projected benefit obligation and fair value of plan assets of $ 38 and $ 0 , respectively.

Elevance Health, Inc.

Notes to Consolidated Financial Statements (continued)

The following table represents the significant weighted-average actuarial assumptions for all plans:

Pension Benefits Other Benefits

2024 2023 2024 2023

Benefit Obligation

Discount rate

Rate of compensation increase 3.00 % 3.00 % 3.00 %

5.47 % 4.91 % 5.34 % 4.83 %

Interest Crediting rate

4.50 % 4.50 % 4.36 % 4.50 %

The following table represents the significant weighted-average actuarial assumptions for all plans:

2024 2023 2022

Net Periodic Benefit Cost

Pension Benefits

Discount rate 4.91 % 5.18 % 2.70 %

Expected rate of return on plan assets 6.47 % 6.58 % 5.02 %

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Discount rate 4.83 % 5.12 % 2.49 %

Rate of compensation increase 3.00 % 3.00 % 3.00 %

Expected rate of return on plan assets 6.64 % 6.57 % 6.43 %

Interest crediting rate 4.50 % 3.89 % 1.56 %

The assumed healthcare cost trend rates used to measure the expected cost of pre-Medicare (those who are not currently eligible for Medicare benefits) other benefits at our December 31, 2023 measurement date was 8.00 % for 2024, with a gradual decline to 4.50 % by the year 2035 .

The assumed healthcare cost trend rates used to measure the expected cost of post-Medicare (those who are currently eligible for Medicare benefits) other benefits at our December 31, 2023 measurement date was 6.50 % for 2024, with a gradual decline to 4.50 % by the year 2035 .

The assumed healthcare cost trend rates used to measure the expected cost of pre-Medicare (those who are not currently eligible for Medicare benefits) benefits at December 31, 2024 was 8.00 % for 2025, with a gradual decline to 4.50 % by the year 2035.

The assumed healthcare cost trend rates used to measure the expected medical and pharmacy cost of post-Medicare (those who are currently eligible for Medicare benefits) benefits at December 31, 2024 was 5.50 % and 10.00 % for 2025, respectively, both with a gradual decline to 4.50 % by the year 2035.

These estimated trend rates are subject to change in the future.

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Other types of investments include insurance contracts designed specifically for employee benefit plans, an investment in a DOL 103-12 trust and certain alternative investments.

Elevance Health, Inc.

Notes to Consolidated Financial Statements (continued)

As of December 31, 2024, there were no significant concentrations of investments in the pension benefit assets or other benefit assets.

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The fair value amounts presented are intended to permit reconciliation of the fair value hierarchy to the total plan assets.

The fair values of our pension benefit assets and other benefit assets by asset category and level inputs at December 31, 2023, excluding cash, investment income receivable and amounts due to/from brokers, resulting in a net asset of $ 43 , and excluding estimated claims settlements to be paid from other benefit assets of $( 23 ), are as follows (see Note 7, “Fair Value,” for additional information regarding the definition of level inputs):

The fair values of our pension benefit assets and other benefit assets by asset category and level inputs at December 31, 2024, excluding cash, investment income receivable and amounts due to/from brokers of $ 30 , and excluding estimated claims settlements to be paid from other benefit assets of $( 19 ), are as follows (see Note 7, “Fair Value,” for additional information regarding the definition of level inputs):

Elevance Health, Inc.

Notes to Consolidated Financial Statements (continued)

Level I Level II Level III Total

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Notes to Consolidated Financial Statements (continued)

The fair values of our pension benefit assets and other benefit assets by asset category and level inputs at December 31, 2022, excluding cash, investment income receivable and amounts due to/from brokers, resulting in a net asset of $ 36 , and excluding estimated claims settlements to be paid from other benefit assets of $( 17 ), are as follows:

The fair values of our pension benefit assets and other benefit assets by asset category and level inputs at December 31, 2023, excluding cash, investment income receivable and amounts due to/from brokers of $ 43 , and excluding estimated claims settlements to be paid from other benefit assets of $( 23 ), are as follows:

Level I Level II Level III Total

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Pension Benefit Assets:

Cash equivalents

$ 2 $ — $ — $ 2

Equity securities:

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Mutual funds 17 — — 17

Fixed maturity securities:

Government securities — 3 — 3

Corporate securities — 3 — 3

Asset-backed securities — 3 — 3

Other types of investments:

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Total other benefit assets

In order to conform with current year presentation, the table above includes a reclassification of the commingled fund from Level II into alternative investments measured using NAV as a practical expedient.

This reclassification did not have any impact on total plan assets.

Elevance Health, Inc.

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Actual return on plan assets relating to assets still held at the reporting date

( 22 ) ( 53 ) ( 75 )

Purchases 6 — 6

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Actual return on plan assets relating to assets still held at the reporting date

( 22 ) ( 53 ) ( 75 )

Purchases 9 — 9

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Ending balance at December 31, 2022 $ 154 $ 270 $ 424

There were no other transfers into or out of Level III during the years ended December 31, 2023, 2022 or 2021.

Our current funding strategy is to fund an amount at least equal to the minimum required funding as determined under ERISA with consideration of maximum tax deductible amounts.

We may elect to make discretionary contributions up to the

There were no transfers into or out of Level III during the years ended December 31, 2024, 2023 or 2022.

Elevance Health, Inc.

Notes to Consolidated Financial Statements (continued)

maximum amount deductible for income tax purposes.

For the years ended December 31, 2023, 2022 and 2021, no material contributions were necessary to meet ERISA required funding levels.

However, during each of the years ended December 31, 2023, 2022 and 2021, we made tax deductible discretionary contributions to the pension benefit plans of $ 4 , $ 4 , and $ 7 , respectively.

Employer contributions to other benefit plans represent discretionary contributions and do not include payments to retirees for current benefits.

Our estimated future payments for pension benefits and other benefits, which reflect expected future service, as appropriate, are as follows:

Benefits Other

2024 $ 125 $ 29

2029 - 2033 492 99

In addition to the defined benefit plans, we maintain the Elevance Health 401(k) Plan, which is a qualified defined contribution plan covering substantially all employees.

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Amounts incurred related to prior years vary from previously estimated liabilities as the claims are ultimately settled.

Liabilities at any period-end are continually reviewed and re-estimated as information regarding actual claims payments, or runout, becomes known.

Liabilities at any period-end are continually reviewed and re-estimated as information regarding actual claims payments, or run out, becomes known.

This information is compared to the originally established year end liability.

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The prior year redundancy of $ 1,731 shown above for the year ended December 31, 2024, represents an estimate based on paid claim activity from January 1, 2024 to December 31, 2024.

Medical claim liabilities are usually described as

Elevance Health, Inc.

Notes to Consolidated Financial Statements (continued)

having a “short tail,” which means that they are generally paid within twelve months of the member receiving service from the provider.

Medical claim liabilities are usually described as having a “short tail,” which means that they are generally paid within twelve months of the member receiving service from the provider.

Accordingly, the majority of the $ 1,731 redundancy relates to claims incurred in calendar year 2023.

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These vital assumptions can be affected by variables such as utilization levels, unit costs, mix of business, benefit plan designs, provider reimbursement levels, processing system conversions and changes, claim inventory levels, claim processing and submission patterns, and operational changes resulting from business combinations.

We had increased estimation uncertainty on our incurred but not reported liability at December 31, 2022, 2021 and 2020.

Slowdowns in claims submission patterns and increases in utilization levels for COVID-19 testing and treatment are the primary factors that led to the increased estimation uncertainty.

Favorable Developments

4 unchanged sentences

Total $ ( 1,731 ) $ ( 1,571 ) $ ( 869 )

The favorable development recognized in 2024 resulted primarily from completion factors developing more favorably than originally expected as well as a smaller but significant contribution from trend factors in late 2023.

Elevance Health, Inc.

Notes to Consolidated Financial Statements (continued)

The favorable development recognized in 2023 resulted primarily from trend factors in late 2022 developing more favorably than originally expected.

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The favorable development recognized in 2022 resulted primarily from trend factors in late 2021 developing more favorably than originally expected as well as a smaller contribution from completion factor development.

The favorable development recognized in 2021 resulted primarily from trend factors in late 2020 developing more favorably than originally expected as well as a smaller but significant contribution from completion factor development.

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

11 unchanged sentences

Total $ 369,947

Elevance Health, Inc.

Notes to Consolidated Financial Statements (continued)

Paid claims development, net of reinsurance, for the years ended December 31, 2024, 2023 and 2022 is as follows:

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Our cumulative number of reported claims may not be comparable to similar measures reported by other health benefits companies.

The reconciliation of incurred and paid claims development information for the three years ended December 31, 2023, reflected in the tables above, to the consolidated ending balance for medical claims payable included in the consolidated balance sheet, as of December 31, 2023, is as follows:

Elevance Health, Inc.

Notes to Consolidated Financial Statements (continued)

The reconciliation of incurred and paid claims development information for the three years ended December 31, 2024, reflected in the tables above, to the consolidated ending balance for medical claims payable included in the consolidated balance sheets, as of December 31, 2024, is as follows:

Cumulative incurred claims and allocated claim adjustment expenses, net of reinsurance $ 369,947

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Insurance lines other than short duration 256

Liabilities held for sale

Gross medical claims payable, end of year $ 15,746

4 unchanged sentences

Outstanding short-term FHLB borrowings at December 31, 2024 had fixed interest rates of 4.43 %.

We have a senior revolving credit facility (the “ 5 -Year Facility”) with a group of lenders for general corporate purposes.

The 5 -Year Facility provides credit of up to $ 4,000 and matures in April 2027.

Our ability to borrow under the 5 -Year Facility is subject to compliance with certain covenants, including covenants requiring us to maintain a defined debt-to-capital ratio of not more than 60 %, subject to increase in certain circumstances set forth in the credit agreement for the 5 -Year Facility.

As of December 31, 2024, our debt-to-capital ratio, as defined and calculated under the 5 -Year Facility, was 43.0 %.

We do not believe the restrictions contained in our 5 -Year Facility covenants materially affect our financial or operating flexibility.

As of December 31, 2024, we were in compliance with all of our debt covenants under the 5 -Year Facility.

There were no amounts outstanding under the 5 -Year Facility at any time during the years ended December 31, 2024 or 2023.

We have an authorized commercial paper program of up to $ 4,000 , the proceeds of which may be used for general corporate purposes.

At December 31, 2024 and 2023, we had $ 0 outstanding under our commercial paper program.

Beginning in 2023, we reclassified our commercial paper balances from long-term debt to short-term debt as our intent is to not replace short-term commercial paper outstanding at expiration with additional short-term commercial paper for an uninterrupted period extending for more than one year.

Elevance Health, Inc.

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3.600 %, due 2051

Surplus note:

4.550 % due 2052

Senior convertible debentures:

6.100 %, due 2052

5.125 %, due 2053

4.850 %, due 2054

5.650 %, due 2054

5.700 %, due 2055

5.850 % due 2064

Surplus note:

9.000 %, due 2027

Total Long-Term Debt

30,867 24,895

Current portion of long-term debt

( 1,649 ) ( 1,649 )

Long-term debt, less current portion

Elevance Health, Inc.

Notes to Consolidated Financial Statements (continued)

$ 29,218 $ 23,246

All debt is a direct obligation of Elevance Health, Inc., except for the surplus note and the FHLB borrowings.

We generally issue senior unsecured notes (“Notes”) for long-term borrowing purposes.

Certain of these Notes may have a call feature that allows us to redeem the Notes at any time at our option and/or a put feature that allows a Note holder to redeem the Notes upon the occurrence of both a change in control event and a downgrade of the Notes below an investment grade rating.

Certain of these Notes may have a call feature that allows us to redeem the Notes at any time at our option and/or a put feature that allows a Note holder to

Elevance Health, Inc.

Notes to Consolidated Financial Statements (continued)

redeem the Notes upon the occurrence of both a change in control event and a downgrade of the Notes below an investment grade rating.

On January 15, 2025, we repaid, at maturity, the $ 1,250 outstanding balance of our 2.375 % senior unsecured notes.

On December 1, 2024, we repaid, at maturity, the $ 850 outstanding balance of our 3.35 % senior unsecured notes.

On October 31, 2024, we issued $ 350 aggregate principal amount of 4.500 % Notes due 2026 (the “New 2026 Notes”), $ 750 aggregate principal amount of 4.750 % Notes due 2030 (the “2030 Notes”), $ 750 aggregate principal amount of 4.950 % Notes due 2031 (the “2031 Notes”), $ 1,200 aggregate principal amount of 5.200 % Notes due 2035 (the “2035 Notes”), $ 1,350 aggregate principal amount of 5.700 % Notes due 2055 (the “2055 Notes”) and $ 800 aggregate principal amount of 5.850 % Notes due 2064 (the “2064 Notes”) under our shelf registration statement.

Interest on the New 2026 Notes is payable semi-annually in arrears on April 30 and October 30 of each year, commencing April 30, 2025.

Interest on the 2030 Notes, 2035 Notes and 2055 Notes are payable semi-annually in arrears on February 15 and August 15 of each year, commencing February 1, 2025.

Interest on the 2031 Notes and 2064 Notes are payable semi-annually in arrears on May 1 and November 1 of each year, commencing May 1, 2025.

We used the net proceeds for working capital and general corporate purposes, including, but not limited to, the funding of acquisitions, repayment of short-term and long-term debt and the repurchase of our common stock pursuant to our share repurchase program.

On August 15, 2024, we repaid, at maturity, the $ 799 outstanding balance of our 3.500 % senior unsecured notes.

On May 30, 2024, we issued $ 600 aggregate principal amount of 5.150 % Notes due 2029 (the “2029 Notes”), $ 1,000 aggregate principal amount of 5.375 % Notes due 2034 (the “2034 Notes”) and $ 1,000 aggregate principal amount of 5.650 % Notes due 2054 (the “2054 Notes”, and, together with the 2029 Notes and the 2034 Notes, the “Notes”) under our shelf registration statement.

Interest on the Notes is payable semi-annually in arrears on June 15 and December 15 of each year, commencing December 15, 2024.

On February 8, 2023, we issued $ 500 aggregate principal amount of 4.900 % Notes due 2026 (the “2026 Notes”), $ 1,000 aggregate principal amount of 4.750 % Notes due 2033 (the “2033 Notes”) and $ 1,100 aggregate principal amount of 5.125 % Notes due 2053 (the “2053 Notes”) under our shelf registration statement.

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Interest on these notes is payable semi-annually in arrears on May 15 and November 15 of each year, commencing November 15, 2022.

We used the net proceeds for working capital and general corporate purposes, such as the funding of acquisitions, repayment of short-term and long-term debt and the repurchase of our common stock pursuant to our share repurchase program.

On May 15, 2021, we redeemed the $ 700 outstanding principal balance of our 3.700 % Notes due August 15, 2021 at a redemption price equal to 100% of the aggregate principal amount of the notes being redeemed, plus accrued and unpaid interest.

On March 17, 2021, we issued $ 500 aggregate principal amount of 0.450 % Notes due 2023, $ 750 aggregate principal amount of 1.500 % Notes due 2026, $ 1,000 aggregate principal amount of 2.550 % Notes due 2031 and $ 1,250 aggregate principal amount of 3.600 % Notes due 2051 under our shelf registration statement.

Interest on these notes is payable semiannually in arrears on March 15 and September 15 of each year, commencing September 15, 2021.

Additionally, during the year ended December 31, 2021, we repurchased $ 52 of outstanding principal amount of certain other senior unsecured notes, plus applicable premium for early redemption plus accrued and unpaid interest, for cash totaling $ 67 .

We recognized a loss on extinguishment of debt of $ 15 for the repurchase of these notes.

The surplus note is an unsecured obligation of Anthem Insurance Companies, Inc.

(“Anthem Insurance”), a wholly owned subsidiary, and is subordinate in right of payment to all of Anthem Insurance’s existing and future indebtedness.

Any payment of interest or principal on the surplus note may be made only with the prior approval of the Indiana Department of Insurance (“IDOI”) and only out of capital and surplus funds of Anthem Insurance that the IDOI determines to be available for the payment under Indiana insurance laws.

We used the net proceeds for working

Elevance Health, Inc.

Notes to Consolidated Financial Statements (continued)

We have a senior revolving credit facility (the “5-Year Facility”) with a group of lenders for general corporate purposes.

The 5-Year Facility provides credit of up to $ 4,000 and matures in April 2027.

Our ability to borrow under the 5-Year Facility is subject to compliance with certain covenants, including covenants requiring us to maintain a defined debt-to-capital ratio of not more than 60%, subject to increase in certain circumstances set forth in the credit agreement for the 5-Year Facility.

As of December 31, 2023, our debt-to-capital ratio, as defined and calculated under the 5-Year Facility, was 38.9%.

We do not believe the restrictions contained in our 5-Year Facility covenants materially affect our financial or operating flexibility.

As of December 31, 2023, we were in compliance with all of our debt covenants under the 5-Year Facility.

There were no amounts outstanding under the 5-Year Facility at any time during the years ended December 31, 2023 or 2022.

We have an authorized commercial paper program of up to $ 4,000 , the proceeds of which may be used for general corporate purposes.

At December 31, 2023 and 2022, we had $ 0 outstanding under our commercial paper program.

Beginning in 2023, we have reclassified our commercial paper balances from long-term debt to short-term debt as our intent is to not replace short-term commercial paper outstanding at expiration with additional short-term commercial paper for an uninterrupted period extending for more than one year.

capital and general corporate purposes, such as the funding of acquisitions, repayment of short-term and long-term debt and the repurchase of our common stock pursuant to our share repurchase program.

Convertible Debentures

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We elected to settle the excess of the principal amount of the conversion with cash for total payments of $ 299 .

During the year ended December 31, 2021, $ 54 aggregate principal amount of the Debentures was surrendered for conversion by certain holders in accordance with the terms and provisions of the Indenture.

We elected to settle the excess of the principal amount of the conversions with cash for total payments of $ 302 .

We recognized a loss on the extinguishment of debt related to the Debentures of $ 6 , based on the fair values of the debt on the conversion settlement dates.

Prior to 2022, we accounted for these Debentures in accordance with the FASB cash conversion guidance for debt with conversion and other options at the time of issue.

As a result, the value of the embedded conversion option, net of deferred taxes and equity issuance costs, was bifurcated from its debt host and recorded as a component of additional paid-in capital in our consolidated balance sheets.

We adopted ASU 2020-06 on January 1, 2022 using the modified retrospective transition method, eliminating the bifurcation of the embedded conversion option.

For additional information, see Note 2, “Basis of Presentation and Significant Accounting Policies.”

During the years ended December 31, 2023, 2022 and 2021, we recognized $ 0 , $ 2 and $ 4 , respectively, of interest expense related to the Debentures, of which $ 0 , $ 2 and $ 3 , respectively, represented interest expense recognized at the stated interest rate of 2.750 % and $ 0 , $ 0 and $ 1 , respectively, represented interest expense resulting from amortization of the debt discount.

We recognized $ 2 of interest expense related to the Debentures during 2022.

Interest paid on our total outstanding debt during 2024, 2023 and 2022 was $ 1,239 , $ 1,032 , and $ 878 , respectively.

6 unchanged sentences

2029, $ 1,423 and thereafter, $ 23,341 .

Elevance Health, Inc.

Notes to Consolidated Financial Statements (continued)

Commitments and Contingencies

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Regulatory Agencies, the U.S.

Elevance Health, Inc.

Notes to Consolidated Financial Statements (continued)

Attorney General and subcommittees of the U.S.

Such government actions could result in the imposition of civil or criminal fines, penalties, other sanctions and additional rules, regulations or other restrictions on our business operations.

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

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

Blue Cross Blue Shield Antitrust Litigation

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District Court for the Northern District of Alabama (the “Court”).

Generally, the suits allege that the BCBSA and the Blue plans have conspired to horizontally allocate geographic markets through license agreements, best efforts rules that limit the percentage of non-Blue revenue of each plan, restrictions on acquisitions, rules governing the BlueCard ® and National Accounts programs and other arrangements in violation of the Sherman Antitrust Act (“Sherman Act”) and related state laws.

The cases were brought by two putative nationwide classes of plaintiffs, health plan subscribers and providers.

In April 2018, the Court issued an order on the parties’ cross motions for partial summary judgment, determining that the defendants’ aggregation of geographic market allocations and output restrictions are to be analyzed under a per se standard of review, and the BlueCard ® program and other alleged Section 1 Sherman Act violations are to be analyzed under the rule of reason standard of review.

With respect to whether the defendants operate as a single entity with regard to the enforcement of the Blue Cross Blue Shield trademarks, the Court found that summary judgment was not appropriate due to the existence of genuine issues of material fact.

In April 2019, the plaintiffs filed motions for class certification, which defendants opposed.

The BCBSA and Blue plans approved a settlement agreement and release with the subscriber plaintiffs (the “Subscriber Settlement Agreement”), which agreement required the Court’s approval to become effective.

Elevance Health, Inc.

Notes to Consolidated Financial Statements (continued)

limits the percentage of non-Blue revenue permitted for each Blue plan) and (ii) allowing for some large national employers with self-funded benefit plans to request a bid for insurance coverage from a second Blue plan in addition to the local Blue plan.

The Subscriber Settlement Agreement requires the defendants to make a monetary settlement payment and contains certain terms imposing non-monetary obligations including (i) eliminating the “national best efforts” rule in the BCBSA license agreements (which rule limits the percentage of non-Blue revenue permitted for each Blue plan) and (ii) allowing for some large national employers with self-funded benefit plans to request a bid for insurance coverage from a second Blue plan in addition to the local Blue plan.

In November 2020, the Court issued an order preliminarily approving the Subscriber Settlement Agreement, following which members of the subscriber class were provided notice of the Subscriber Settlement Agreement and an opportunity to opt out of the class.

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The Court amended its Final Approval Order in September 2022, further clarifying the injunctive relief that may be available to subscribers who submitted valid opt-outs .

In compliance with the Subscriber Settlement Agreement, we paid $ 506 into an escrow account in September 2022, for an aggregate and full settlement payment by us of $ 596 , which was accrued in 2020.

Four notices of appeal of the Final Approval Order were filed prior to the September 2022 appeal deadline.

Those appeals were heard by a panel of the United States Court of Appeals for the Eleventh Circuit in September 2023.

In October 2023, the Eleventh Circuit affirmed the Court’s Final Approval Order approving the subscriber settlement.

Petitions for rehearing filed by certain appellants in November 2023 and December 2023 remain pending.

In the event that all appellate rights are exhausted in a manner that affirms the Court’s Final Approval Order, the defendants’ payment and non-monetary obligations under the Subscriber Settlement Agreement will become effective and the funds held in escrow will be distributed in accordance with the Subscriber Settlement Agreement.

In October 2020, after the Court lifted the stay as to the provider litigation, provider plaintiffs filed a renewed motion for class certification, which defendants opposed.

In March 2021, the Court issued an order terminating the pending motion for class certification until the Court determined the standard of review applicable to the providers’ claims.

In response to that order, the parties filed renewed standard of review motions in May 2021.

In June 2021, the parties filed summary judgment motions not critically dependent on class certification.

In February 2022, the Court issued orders (i) granting certain defendants’ motion for partial summary judgment against the provider plaintiffs who had previously released claims against such defendants, and (ii) granting the provider plaintiffs’ motion for partial summary judgment, determining that Ohio v.

American Express Co .

does not affect the standard of review in this case.

In August 2022, the Court issued orders (i) granting in part the defendants’ motion regarding the antitrust standard of review, holding that for the period of time after the elimination of the “national best efforts” rule, the rule of reason applies to the provider plaintiffs’ market allocation conspiracy claims, and (ii) denying the provider plaintiffs’ motion for partial summary judgment on the standard of review, reaffirming its prior holding that the provider groups’ boycott claims are subject to the rule of reason.

In December 2023, the Court denied defendants’ motion for summary judgment on providers’ damage claims as time-barred and speculative and provider plaintiffs’ motion for partial summary judgment on the defendants’ single entity defense due to the existence of genuine issues of material fact.

Providers plaintiffs’ motion for class certification, filed in October 2020, remains pending.

We intend to continue to vigorously defend the provider litigation, which we believe is without merit;

however, its ultimate outcome cannot be presently determined.

The ultimate amount paid by us under the Subscriber Settlement Agreement was $ 604 .

Four notices of appeal of the Final Approval Order were heard by a panel of the United States Court of Appeals for the Eleventh Circuit (the “Eleventh Circuit”) in September 2023, and the Eleventh Circuit affirmed the Court’s Final Approval Order approving the Subscriber Settlement Agreement in October 2023.

Petitions for rehearing were filed by certain appellants in November 2023 and December 2023 and were denied in January 2024.

As a result, the Eleventh Circuit issued a mandate terminating the jurisdiction of the Eleventh Circuit in February 2024.

In March 2024, Home Depot, one of the appellants, filed a petition for certiorari to the United States Supreme Court (the “Supreme Court”).

On the respondents' request, the Supreme Court granted an extension to respond until May 2024.

In April 2024, David Behenna, another appellant, filed a petition for certiorari to the Supreme Court, and the defendants and the subscriber plaintiffs filed briefs in opposition in May 2024.

In June 2024, the Supreme Court declined to grant certiorari, exhausting all appellate rights.

The Subscriber Settlement Agreement and the defendants' payment and non-monetary obligations under the Subscriber Settlement Agreement became effective in June 2024, with the request for second Blue plan bid provisions effective in September 2024.

T he funds held in escrow will be distributed in accordance with the Subscriber Settlement Agreement.

A number of follow-on cases involving entities that opted out of the Subscriber Settlement Agreement have been filed.

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In February 2023, the Court denied the defendants’ motion to dismiss based on a statute of limitations defense in Alaska Air and Jet Blue .

In September 2023, the California court presiding over the VHS case, upheld its prior order granting in part defendants’ motion to strike based on the statute of limitations.

We intend to continue to vigorously defend these follow-on cases, which we believe are without merit;

however, their ultimate outcome cannot be presently determined.

In September 2023, the California court presiding over the VHS case, upheld its prior order granting in part defendants’ motion to strike based on the statute of

Elevance Health, Inc.

Notes to Consolidated Financial Statements (continued)

We intend to continue to vigorously defend these follow-on cases, which we believe are without merit;

however, their ultimate outcome cannot be presently determined.

In October 2020, after the Court lifted the stay as to the provider litigation, provider plaintiffs filed a renewed motion for class certification, which defendants opposed.

In March 2021, the Court issued an order terminating the pending motion for class certification until the Court determined the standard of review applicable to the providers’ claims.

In response to that order, the parties filed renewed standard of review motions, and in June 2021, the parties filed summary judgment motions not critically dependent on class certification.

American Express Co .

does not affect the standard of review in this case.

In January 2024, the Court issued orders (i) denying defendants’ motion for summary judgment on (a) all claims by certain hospital providers and (b) any claims based on the Blue system's rules other than exclusive serviced areas or BlueCard and (ii) denying provider plaintiffs’ motion for partial summary judgment on defendants’ common law trademark claims.

In the third quarter of 2024, the BCBSA, along with the individually named Blue plans approved a settlement agreement and release (the “Provider Settlement Agreement”) with the provider plaintiffs, and in October 2024 the provider plaintiffs filed a motion for preliminary approval with the Court.

The Court granted preliminary approval of the provider settlement on December 4, 2024.

If finally approved by the Court, the Provider Settlement Agreement will require the defendants to make a monetary settlement payment, our portion of which is estimated to be $ 666 , and will contain certain non-monetary terms including (i) expansion of certain opportunities to contract with providers in contiguous service areas, (ii) certain prompt pay commitments, and (iii) various technological enhancements to the BlueCard program.

We recognized our estimated payment obligation under the Provider Settlement Agreement of $ 666 in September 2024.

We recognized this estimated payment obligation as operating expense in the Corporate & Other segment (see Note 20, “Segment Information”).

Express Scripts, Inc.

PBM Litigation

Pharmacy Benefit Management Litigation

In March 2016, we filed a lawsuit against Express Scripts, Inc.

(“Express Scripts”), our vendor at the time for PBM services, captioned Anthem, Inc.

(“Express Scripts”), our vendor at the time for pharmacy benefit management services, captioned Anthem, Inc.

Express Scripts, Inc.

14 unchanged sentences

The District Court dismissed our declaratory judgment claim, our breach of contract claim for failure to prove damages and most of our operational breach claims.

As a result of the summary judgment decision, the only remaining claims as of the filing of this Annual Report on Form 10-K were (i) our operational breach claim based on Express Scripts’ prior authorization processes and (ii) Express Scripts’ counterclaim for breach of the market check provision of the ESI Agreement.

Express Scripts filed a second motion for summary judgment in June 2022, challenging our remaining operational breach claims, which the District Court denied in March 2023.

As a result of the summary judgment decision, only two claims remained.

Express Scripts filed a second motion for summary judgment in June 2022, challenging our remaining operational breach claims, which the

Elevance Health, Inc.

Notes to Consolidated Financial Statements (continued)

District Court denied in March 2023.

In November 2023, the District Court issued a final judgment ending the lawsuit in the District Court after the parties settled and stipulated to dismiss the only remaining claim that had not been disposed of by the court order or stipulation.

In December 2023, we filed a notice of appeal with the United States Court of Appeal for the Second Circuit (the “Second Circuit”), regarding the Pricing Claim.

The Second Circuit has ordered the parties to mediate the Pricing Claim in February 2024.

The ultimate outcome of this appeal cannot be presently determined.

In December 2023, we filed a notice of appeal with the United States Court of Appeals for the Second Circuit (the “Second Circuit”), regarding the Pricing Claim.

Mediation ordered by the Second Circuit occurred in March 2024 and was unsuccessful.

Oral argument before the Second Circuit was held in October 2024.

In November 2024, the Court affirmed the trial court's decision dismissing the case.

A motion for rehearing was submitted which was denied.

The matter is now closed.

Medicare Risk Adjustment Litigation

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Department of Justice (“DOJ”) filed a civil lawsuit against Elevance Health, Inc.

District Court for the Southern District of New York (the “New York District Court”) in a case captioned United States v.

in the District Court in a case captioned United States v.

Anthem, Inc .

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The DOJ filed an amended complaint in July 2020, alleging the same causes of action but revising some of its factual allegations.

In September 2020, we filed a motion to transfer the lawsuit to the Southern District of Ohio, a motion to dismiss part of the lawsuit, and a motion to strike certain allegations in the amended complaint, all of which the New York District Court denied in October 2022.

In November 2022, we filed an answer.

In March 2023, discovery commenced, and an initial case management conference was held in April 2023.

The Court entered a scheduling order requiring fact discovery to be completed by June 2024 and expert discovery to be completed by February 2025.

Fact discovery is ongoing.

In December 2024, the District Court issued a scheduling order setting the deadlines for the completion of fact discovery in August 2025 and April 2026 for the completion of expert discovery.

We intend to continue to vigorously defend this suit, which we believe is without merit;

however, the ultimate outcome cannot be presently determined.

Investigations of CareMore and HealthSun

With the assistance of outside counsel, we are conducting investigations of risk-adjustment practices involving data submitted to CMS (unrelated to our retrospective chart review program) at CareMore Health Plans, Inc.

(“CareMore”), one of our California subsidiaries, and HealthSun Health Plans, Inc.

(“HealthSun”), one of our Florida subsidiaries.

Our CareMore investigation has resulted in the termination of CareMore’s relationship with one contracted provider in California.

Elevance Health, Inc.

Notes to Consolidated Financial Statements (continued)

HealthSun investigation has focused on risk adjustment practices initiated prior to our acquisition of HealthSun in December 2017 that continued after the acquisition.

We have voluntarily self-disclosed the existence of both of our investigations to CMS and the Criminal and Civil Divisions of the DOJ.

We cooperated with the investigations of the Criminal and Civil Divisions of the DOJ related to these risk adjustment practices, and have submitted corrected data to CMS related to these investigations.

In an action filed in the Delaware Court of Chancery, we also asserted indemnity claims for escrowed funds under the HealthSun purchase agreement for, among other things, breach of healthcare and financial representation provisions, based on the conduct discovered during our investigation.

The litigation related to our indemnity claims has been resolved.

In October 2023, the DOJ declined to prosecute HealthSun.

HealthSun agreed to repay, and has now repaid, CMS approximately $ 53 .

Other Contingencies

5 unchanged sentences

Contractual Obligations and Commitments

In March 2020, we entered into an agreement with a vendor for information technology infrastructure and related management and support services through June 2025.

The agreement superseded certain prior agreements for such services and includes provisions for additional services not provided under those agreements.

Our remaining commitment under this agreement at December 31, 2023 is approximately $ 481 .

We will have the ability to terminate the agreement upon the occurrence of certain events, subject to early termination fees.

We formed CarelonRx, to market and offer pharmacy services to our affiliated health plan customers, as well as to external customers outside of the health plans we own, starting in the second quarter of 2019.

In September 2024, we extended our agreement with a vendor for information technology infrastructure and related management and support services through June 2029.

Our remaining commitment under this agreement is approximately $ 2,065 .

We have the ability to terminate the agreement upon the occurrence of certain events, subject to early termination fees.

CarelonRx markets and offers pharmacy services to our affiliated health plan customers throughout the country, as well as to customers outside of the health plans we own.

The comprehensive pharmacy services portfolio includes all core pharmacy services, such as home delivery and specialty pharmacies, claims adjudication, formulary management, pharmacy networks, rebate administration, a prescription drug database and member services.

CarelonRx delegates certain core pharmacy services to CaremarkPCS Health, L.L.C., which is a subsidiary of CVS Health Corporation, pursuant to an agreement, that is set to terminate on December 31, 2025.

CarelonRx delegates certain core pharmacy services to CVS, pursuant to the CVS Agreement, with the current contractual term extending through December 31, 2027.

We can elect to have CVS continue to provide services to us for a three-year extension period on the same terms and conditions as in the current CVS Agreement in the event of a termination or non-renewal by either party.

We have financial guarantees related to standby letters of credit and surety bonds related to certain contractual commitments which totaled $ 912 as of December 31, 2024.

We do not believe such obligations will materially affect its financial position, results of operations, or cash flows.

Elevance Health, Inc.

Notes to Consolidated Financial Statements (continued)

The Company has unfunded loan commitments to certain equity investees of $ 501 at December 31, 2024.

The Company does not believe such obligations will materially affect its financial position, results of operations, or cash flows.

Vulnerability from Concentrations

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The term of the 2017 Incentive Plan is such that no awards may be granted on or after May 18, 2027.

The 2017 Incentive Plan gives authority to the Compensation Committee of the Board of Directors to make incentive awards to our non-employee directors, employees and consultants, consisting of stock options, stock, restricted stock, restricted stock units, cash-based awards, stock appreciation rights, performance shares and performance

Elevance Health, Inc.

Notes to Consolidated Financial Statements (continued)

The 2017 Incentive Plan gives authority to the Compensation and Talent Committee of the Board of Directors to make incentive awards to our non-employee directors, employees and consultants, consisting of stock options, stock, restricted stock, restricted stock units, cash-based awards, stock appreciation rights, performance shares and performance units.

The 2017 Incentive Plan limits the number of available shares for issuance to 37.5 shares, subject to adjustment as set forth in the 2017 Incentive Plan.

21 unchanged sentences

Exercisable at December 31, 2024 1.9 300.24 4.41 $ 166

Elevance Health, Inc.

Notes to Consolidated Financial Statements (continued)

The intrinsic value of options exercised during the years ended December 31, 2024, 2023 and 2022 amounted to $ 123 , $ 69 and $ 120 , respectively.

9 unchanged sentences

Nonvested at December 31, 2024 1.0 478.70

Elevance Health, Inc.

Notes to Consolidated Financial Statements (continued)

During the year ended December 31, 2024, we granted approximately 0.2 restricted stock units that are contingent upon us achieving certain revenue and earnings targets over the three-year period of 2024 to 2026.

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Weighted-average expected life (years) 4.40 4.40 5.10

The following weighted-average fair values per share were determined for the years ending December 31, 2023, 2022 and 2021:

Elevance Health, Inc.

Notes to Consolidated Financial Statements (continued)

The following weighted-average fair values per share were determined for the years ended December 31, 2024, 2023 and 2022:

2024 2023 2022

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The Stock Purchase Plan discount was recognized as compensation expense for the year ended December 31, 2024, based on GAAP guidance.

During the years ended

Elevance Health, Inc.

Notes to Consolidated Financial Statements (continued)

December 31, 2023, 2022 and 2021, we issued 0.1 , 0.1 and 0.1 shares, respectively, under the Stock Purchase Plan, and we received cash of $ 65 , $ 62 and $ 55 , respectively, for such shares.

During the years ended December 31, 2024, 2023 and 2022, we issued 0.2 , 0.1 and 0.1 shares, respectively, under the Stock Purchase Plan, and we received cash of $ 65 , $ 65 and $ 62 , respectively, for such shares.

As of December 31, 2024, 4.0 shares were available for issuance under the Stock Purchase Plan.

17 unchanged sentences

This quarterly dividend is payable on March 25, 2025 to the shareholders of record as of March 10, 2025.

Elevance Health, Inc.

Notes to Consolidated Financial Statements (continued)

Under our Board of Directors’ authorization, we maintain a common stock repurchase program.

On January 24, 2023, our Audit Committee, pursuant to authorization granted by the Board of Directors, authorized a $ 5,000 increase to our common stock repurchase program.

On October 15, 2024, our Audit Committee, pursuant to authorization granted by the Board of Directors, authorized an $ 8,000 increase to the common stock repurchase program.

No duration has been placed on our common stock repurchase program, and we reserve the right to discontinue the program at any time.

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Authorization remaining at end of year $ 9,300 $ 4,200

Elevance Health, Inc.

Notes to Consolidated Financial Statements (continued)

We expect to utilize the remaining authorized amount over a multi-year period, subject to market and industry conditions.

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Beginning of year balance $ ( 632 ) $ ( 1,755 ) $ 494

Other comprehensive income (loss) before reclassifications, net of tax (expense) benefit of $( 218 ), $ 926 , and $ 121 , respectively

Other comprehensive (loss) income before reclassifications, net of tax benefit (expense) of $ 44 , $( 218 ), and $ 926 , respectively

( 153 ) 760 ( 2,614 )

Amounts reclassified from accumulated other comprehensive income, net of tax benefit (expense) of $( 113 ), $( 94 ), and $ 27 , respectively

Amounts reclassified from accumulated other comprehensive income, net of tax expense of $( 82 ), $( 113 ), and $( 94 ), respectively

Other comprehensive income (loss)

103 1,117 ( 2,260 )

Other comprehensive (loss) income 1,117 ( 2,260 ) ( 457 )

Other comprehensive loss attributable to noncontrolling interests, net of tax benefit (expense) of $ 1 , $( 3 ), and $ 1 , respectively

Other comprehensive income attributable to noncontrolling interests, net of tax benefit (expense) of $ 1 , $ 1 , and $( 3 ), respectively

End of year balance ( 523 ) ( 632 ) ( 1,755 )

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Beginning of year balance ( 3 ) ( 3 ) —

Other comprehensive income, net of tax benefit (expense) of $ 0 , $ 0 ,and $( 1 ), respectively

Other comprehensive income (loss), net of tax expense of $( 1 ), $ 0 , and $ 0 , respectively

End of year balance ( 2 ) ( 3 ) ( 3 )

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End of year balance ( 207 ) ( 211 ) ( 229 )

Pension and other postretirement benefits:

Pension and other benefits:

Beginning of year balance ( 459 ) ( 499 ) ( 429 )

Other comprehensive income (loss), net of tax expense of $ 0 , $( 39 ), and $( 23 ), respectively

40 ( 70 ) 123

End of year balance ( 399 ) ( 459 ) ( 499 )

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Beginning of year balance 10 13 ( 19 )

Adoption of ASU 2018-12 — — ( 12 )

Other comprehensive (loss) income, net of tax benefit (expense) of $ 1 , $ 1 , and $( 10 ), respectively

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End of year balance ( 24 ) ( 18 ) ( 17 )

Total beginning of year accumulated other comprehensive (loss) income ( 2,490 ) ( 197 ) 150

Adoption of ASU 2018-12 — — ( 12 )

Total other comprehensive income (loss), net of tax (expense) benefit of $( 362 ), $ 799 , and $ 112 , respectively

Total beginning of year accumulated other comprehensive loss

( 1,313 ) ( 2,490 ) ( 197 )

Total other comprehensive loss attributable to noncontrolling interests, net of tax benefit (expense) of $ 1 , $( 3 ), and $ 1 , respectively

Total other comprehensive income (loss), net of tax benefit (expense) of $( 42 ), $( 362 ), and $ 799 , respectively

160 1,171 ( 2,304 )

Total other comprehensive income attributable to noncontrolling interests, net of tax benefit (expense) of $ 1 , $ 1 , and $( 3 ), respectively

Total end of year accumulated other comprehensive loss

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3.3 % 4.2 % 4.1 %

The table above includes certain reclassifications between direct and assumed premiums for 2022 and 2021.

These reclassifications did not impact any amounts presented in the consolidated financial statements.

The difference between written premiums and earned premiums is immaterial in each of the years presented above.

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Carelon Services 2,630 1,679 1,499

( 340 ) ( 234 ) ( 138 )

Eliminations ( 1,132 ) ( 340 ) ( 234 )

Net premiums $ 144,166 $ 142,854 $ 133,229

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Net benefit expense $ 127,567 $ 124,330 $ 116,642

The table above includes certain reclassifications between direct and assumed benefit expense for 2022 and 2021.

These reclassifications did not impact any amounts presented in the consolidated financial statements.

Elevance Health, Inc.

Notes to Consolidated Financial Statements (continued)

We lease office space and certain computer and related equipment using noncancelable operating leases.

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Lease liabilities, noncurrent Other noncurrent liabilities 658 685

Elevance Health, Inc.

Notes to Consolidated Financial Statements (continued)

Years Ended December 31

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Total lease liabilities $ 811

Elevance Health, Inc.

Notes to Consolidated Financial Statements (continued)

Shareholders ’ Earnings per Share

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During the years ended December 31, 2024, 2023 and 2022, weighted-average shares related to certain stock options of 0.7 , 0.8 and 0.4 , respectively, were excluded from the denominator for diluted shareholders’ earnings per share because the stock options were anti-dilutive.

During the years ended December 31, 2023, 2022 and 2021, we issued approximately 0.2 , 0.2 and 0.3 restricted stock units, respectively, of which vesting was contingent upon us meeting certain earnings targets.

Elevance Health, Inc.

Notes to Consolidated Financial Statements (continued)

During each of the years ended December 31, 2024, 2023 and 2022, we issued approximately 0.2 restricted stock units, of which vesting was contingent upon us meeting certain earnings targets.

Contingent restricted stock units are excluded from the denominator for diluted shareholders’ earnings per share and are included only if and when the contingency is met.

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Segment Information

As discussed in Note 1, “Organization,” we are reorganizing our brand portfolio into three core go-to-market brands.

Our branding strategy reflects the evolution of our business from a traditional health insurance company to a lifetime, trusted health partner.

We now report our results of operations in the following four reportable segments:

During the fourth quarter of 2023, we moved our Carelon Global Solutions international businesses from the Corporate & Other reportable segment to the Carelon Services reportable segment.

All prior period reportable segment information has been reclassified for comparability to conform to the current presentation.

Our Health Benefits segment offers a comprehensive suite of health plans and services to our Individual, Employer Group risk-based, Employer Group fee-based, BlueCard®, Medicare, Medicaid and FEHB program members.

Our Health Benefits segment also includes our National Government Services business.

We report our results of operations in the following four reportable segments:

Health Benefits, CarelonRx, Carelon Services and Corporate & Other.

An immaterial amount of our total consolidated revenues is derived from activities outside of the U.S.

and Puerto Rico.

The Health Benefits segment offers health products on a full-risk basis;

provides a broad array of administrative managed care services to our fee-based customers;

and provides a variety of specialty and other insurance products and services such as stop loss, dental, vision, life, disability and supplemental health insurance benefits.

and provides a variety of specialty and other insurance products and services such as stop loss, dental, vision and supplemental health insurance benefits.

Our CarelonRx segment includes our pharmacy services business.

CarelonRx markets and offers pharmacy services to our affiliated health plan customers, as well as to external customers outside of the health plans we own.

CarelonRx offers a comprehensive pharmacy services portfolio, which includes all core pharmacy services, such as home delivery and specialty pharmacies, claims adjudication, formulary management, pharmacy networks, rebate administration, a prescription drug database and member services.

Our Carelon Services segment integrates physical, behavioral, social and pharmacy services to deliver whole health affordably through creating value by offering market-competitive services, powered by analytics.

Carelon Services offers a broad array of healthcare related services and capabilities to internal and external customers including utilization management, behavioral health, integrated care delivery, palliative care, payment integrity services and subrogation services,

Elevance Health, Inc.

Notes to Consolidated Financial Statements (continued)

as well as health and wellness programs.

At the end of 2023, Carelon Services integrated Carelon Global Solutions into the Carelon family of offerings.

The companies under Carelon Global Solutions have been providing services related to data management, information technology, and business operations since 2019 and were previously included within our Corporate & Other segment.

Our Corporate and Other segment includes our businesses that do not individually meet the quantitative threshold for an operating segment, as well as corporate expenses not allocated to our other reportable segments.

Our Carelon Services segment integrates physical, behavioral, pharmacy, and social services with the aim of delivering whole health affordably by offering a broad array of healthcare related services and capabilities to internal and external customers through our Carelon Health and Carelon Insights businesses.

Carelon promotes affordability by managing complex areas of the healthcare system, leveraging data and insights to ensure members receive safe, appropriate, high-quality care and providers are reimbursed accurately and timely.

Our approach to cost management relies on capabilities including provider enablement, value-based networks, member engagement, and utilization management.

Our care delivery services primarily target serving chronic and complex populations by providing personalized care in the home and virtually.

As a part of Carelon Health, we completed our acquisition of CareBridge at the end of 2024, which provides virtual care to complex Medicaid and Medicare patients and supports plans in managing home and community-based services.

Our Corporate & Other segment includes our businesses that do not individually meet the quantitative threshold for an operating segment, as well as corporate expenses not allocated to our other reportable segments.

We define operating revenues to include premiums, product revenue and service fees.

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Operating gain is calculated as total operating revenue less benefit expense, cost of products sold and operating expense.

Affiliated revenues represent revenues or costs for services provided to our subsidiaries by CarelonRx and Carelon Services, in addition to certain administrative and other services provided by our international businesses, which are recorded at cost or management’s estimate of fair market value.

These affiliated revenues are eliminated in consolidation.

Affiliated operating revenues represent revenues or costs for services provided to our subsidiaries by CarelonRx and Carelon Services, in addition to certain administrative and other services provided by our international businesses, which are recorded at cost or management’s estimate of fair market value.

These affiliated operating revenues are eliminated in our consolidated financial statements.

For segment reporting, we present all capitation risk arrangements on a gross basis;

therefore, eliminations also include adjustments for capitated risk arrangements that are recognized on a net basis under GAAP.

Through our participation in various federal government programs, we generated approximately 29 % of our total consolidated revenues from agencies of the U.S.

government for the year ended December 31, 2023, and 28 % for each of the years ended December 31, 2022 and 2021.

Through our participation in various federal government programs, we generated approximately 31 %, 29 % and 28 % of our total consolidated revenues from agencies of the U.S.

government for the year ended December 31, 2024, 2023 and 2022, respectively.

The majority of these revenues are contained in our Health Benefits segment.

An immaterial amount of our total consolidated revenues is derived from activities outside of the U.S.

and Puerto Rico.

The accounting policies of the segments are consistent with those described in the summary of significant accounting policies in Note 2, “Basis of Presentation and Significant Accounting Policies,” except that all capitation risk arrangements are reported on a gross basis with an adjustment included in eliminations for capitated risk arrangements that are presented on a net basis under GAAP.

We evaluate performance of the reportable segments based on operating gain or loss as defined above.

We evaluate net investment income, net gains (losses) on financial instruments, interest expense, amortization expense, gain or loss on extinguishment of debt, income taxes and assets and liabilities on a consolidated basis, as these items are managed in a corporate shared service environment and are not the responsibility of segment operating management.

Elevance Health, Inc.

Notes to Consolidated Financial Statements (continued)

Our chief operating decision maker (the “CODM”) is our Chief Executive Officer.

The CODM assesses the performance of our reportable segments based on operating gain or loss as defined above.

The CODM evaluates net investment income, net gains (losses) on financial instruments, interest expense, depreciation and amortization expense, income taxes and assets, liabilities and equity on a consolidated basis, as these items are managed in a corporate shared service environment and are not the responsibility of segment operating management.

The CODM uses operating gain or loss, developed during the annual budget process, and updated during the periodic forecasting process, as a basis to assess performance and allocate operating and capital resources to each segment.

Financial data by reportable segment for the years ended December 31, 2024, 2023 and 2022 is as follows:

Elevance Health, Inc.

Notes to Consolidated Financial Statements (continued)

Benefits CarelonRx Carelon

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Operating revenue - total $ 150,275 $ 35,961 $ 17,961 $ 53,922 $ 309 $ ( 29,302 ) $ 175,204

Benefit expense

$ 126,703 $ — $ 14,388 $ 14,388 $ 19 $ ( 13,543 ) $ 127,567

Cost of products sold

— 32,978 — 32,978 — ( 13,228 ) 19,750

Operating expense

17,329 811 2,856 3,667 1,560 ( 2,531 ) 20,025

Operating gain (loss) $ 6,243 $ 2,172 $ 717 $ 2,889 $ ( 1,270 ) $ — $ 7,862

Depreciation and amortization of property and equipment $ — $ — $ — $ — $ 872 $ — $ 872

Year Ended December 31, 2022 (Restated)

Year Ended December 31, 2023

Premiums $ 141,515 $ — $ 1,679 $ 1,679 $ — $ ( 340 ) $ 142,854

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Operating revenue - total $ 148,571 $ 33,835 $ 14,147 $ 47,982 $ 479 $ ( 26,823 ) $ 170,209

Benefit expense

$ 123,705 $ — $ 10,610 $ 10,610 $ 35 $ ( 10,020 ) $ 124,330

Cost of products sold

— 31,588 — 31,588 — ( 14,295 ) 17,293

Operating expense

17,978 272 2,857 3,129 1,488 ( 2,508 ) 20,087

Operating gain (loss) $ 6,888 $ 1,975 $ 680 $ 2,655 $ ( 1,044 ) $ — $ 8,499

Depreciation and amortization of property and equipment $ — $ — $ — $ — $ 784 $ — $ 784

Year Ended December 31, 2021 (Restated)

Year Ended December 31, 2022

Premiums $ 131,964 $ — $ 1,499 $ 1,499 $ — $ ( 234 ) $ 133,229

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Operating revenue - total $ 138,484 $ 28,526 $ 12,860 $ 41,386 $ 399 $ ( 24,609 ) $ 155,660

Benefit expense

$ 115,869 $ — $ 9,667 $ 9,667 $ 39 $ ( 8,933 ) $ 116,642

Cost of products sold

— 26,544 — 26,544 — ( 13,509 ) 13,035

Operating expense

16,593 114 2,658 2,772 502 ( 2,167 ) 17,700

Operating gain (loss) $ 6,022 $ 1,868 $ 535 $ 2,403 $ ( 142 ) $ — $ 8,283

Depreciation and amortization of property and equipment $ — $ — $ — $ — $ 668 $ — $ 668

Elevance Health, Inc.

Notes to Consolidated Financial Statements (continued)

Asset, liability and equity details by reportable segment have not been disclosed, as we do not internally report such information.

A reconciliation of reportable segments’ operating revenue to the amounts of total revenues included in our consolidated statements of income for the years ended December 31, 2024, 2023 and 2022 is as follows:

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Net investment income 2,051 1,825 1,485

Net (losses) gains on financial instruments ( 694 ) ( 550 ) 318

Net losses on financial instruments

( 445 ) ( 694 ) ( 550 )

Gain on sale of business

Total revenues $ 177,011 $ 171,340 $ 156,595

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Net investment income ( 2,051 ) ( 1,825 ) ( 1,485 )

Net losses (gains) on financial instruments 694 550 ( 318 )

Net losses on financial instruments

Gain on sale of business

Interest expense 1,185 1,030 851

Amortization of other intangible assets 580 885 767

Loss on extinguishment of debt — — 21

Reportable segments’ operating gain $ 7,862 $ 8,499 $ 8,283

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In January 2023, we made an equity investment that resulted in our minority interest ownership of Liberty Dental.

During the year ended December 31, 2023, in the normal course of business, Liberty Dental recognized $ 426 in revenue for administrative services provided to our members, primarily for those members in our Medicare Advantage plans.

During the years ended December 31, 2024 and 2023, in the normal course of business, Liberty Dental provided administrative services to our Medicare Advantage members under a capitated arrangement amounting to $ 519 and $ 426 , respectively, reported in benefit expense.

Statutory Information

The majority of our insurance and HMO subsidiaries report their accounts in conformity with accounting practices prescribed or permitted by state insurance regulatory authorities, commonly referred to as statutory accounting, which vary in certain respects from GAAP.

However, certain of our insurance and HMO subsidiaries, including Blue Cross of California, Blue Cross of California Partnership Plan, Inc., Golden West Health Plan, Inc., Beacon Health Options of California, Inc.

and CareMore Health Plan are regulated by the California Department of Managed Health Care (“DMHC”) and report their accounts in conformity with GAAP (these entities are collectively referred to as the “DMHC regulated entities”).

However, certain of our insurance and HMO subsidiaries, including Blue Cross of California, Blue Cross of California Partnership Plan, Inc., Carelon Behavioral Health of California, Inc.

and Carelon Health of California, Inc.

are regulated by the California Department of Managed Health Care (“DMHC”) and report their accounts in conformity with GAAP (these entities are collectively referred to as the “DMHC regulated entities”).

Typical differences of GAAP reporting as compared to statutory reporting are the recognition of all assets including those that are non-admitted for statutory purposes and recognition of all deferred tax assets without regard to statutory limits.

The National Association of Insurance Commissioners (“NAIC”) developed a codified version of the statutory accounting principles, designed to foster more consistency among the states for accounting guidelines and reporting.

The National Association of Insurance Commissioners (the “NAIC”) developed a codified version of the statutory accounting principles, designed to foster more consistency among the states for accounting guidelines and reporting.

Prescribed statutory accounting practices are set forth in a variety of publications of the NAIC as well as state laws, regulations and general administrative rules.

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RBC is a method developed by the NAIC to determine the minimum amount of statutory capital appropriate for an insurance company or HMO to support its overall business operations in consideration of its size and risk profile.

The formula for determining the amount of RBC specifies various factors, weighted based on the perceived degree of risk, which are applied to certain

The formula for determining the amount of RBC specifies various factors, weighted based on the perceived degree of risk, which are applied to certain financial balances and financial activity.

Below minimum RBC requirements are classified within certain levels, each of

Elevance Health, Inc.

Notes to Consolidated Financial Statements (continued)

financial balances and financial activity.

Below minimum RBC requirements are classified within certain levels, each of which requires specified corrective action.

which requires specified corrective action.

Additionally, the DMHC regulated entities are subject to capital and solvency requirements as prescribed by the DMHC.

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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 8. Financial Statements and Supplementary Data