What changed in this filing

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Item 1. Financial Statements

2025-04-22 compared with 2024-10-17 · 335 added, 422 removed, 635 unchanged (54% of the section changed)

2 unchanged sentences

Consolidated Balance Sheets

September 30,

2025 December 31,

55 unchanged sentences

Three Months Ended

September 30 Nine Months Ended

2024 2023 2024 2023

(In millions, except per share data)

5 unchanged sentences

Net losses on financial instruments ( 464 ) ( 161 )

(Loss) gain on sale of business

( 39 ) — 201 —

Total revenues 48,891 42,577

6 unchanged sentences

Income before income tax expense

1,373 1,654 7,298 6,714

Income tax expense 613 690

Net income 2,184 2,249

Net loss (income) attributable to noncontrolling interests

8 ( 11 ) 4 ( 29 )

Net income attributable to noncontrolling interests

Shareholders’ net income $ 2,183 $ 2,246

7 unchanged sentences

Three Months Ended

September 30 Nine Months Ended

2024 2023 2024 2023

(In millions)

8 unchanged sentences

Other comprehensive income (loss)

898 ( 348 ) 824 ( 22 )

Net loss (income) attributable to noncontrolling interests

8 ( 11 ) 4 ( 29 )

Net loss attributable to noncontrolling interests

Other comprehensive income attributable to noncontrolling interests

3 unchanged sentences

Consolidated Statements of Cash Flows

Nine Months Ended

Three Months Ended

(In millions)

3 unchanged sentences

Net losses on financial instruments 464 161

Gain on sale of business ( 201 ) —

Equity in net losses of other invested assets 15 70

Equity in net (earnings) losses of other invested assets

Depreciation and amortization 373 331

Impairment of property and equipment 103 446

Deferred income taxes ( 174 ) 136

8 unchanged sentences

Income taxes 357 581

Other, net 57 3

Net cash provided by operating activities 1,017 1,978

4 unchanged sentences

Changes in securities lending collateral ( 290 ) ( 212 )

Proceeds from sale of subsidiaries, net of cash sold 399 —

Purchases of subsidiaries, net of cash acquired 4 ( 1,120 )

1 unchanged sentence

Other, net ( 25 ) ( 29 )

Net cash used in investing activities ( 3,529 ) ( 4,543 )

Net cash provided by (used in) investing activities

103 ( 2,310 )

Financing activities

Proceeds from long-term borrowings 2,580 2,574

Repayments of long-term borrowings ( 1,250 ) —

8 unchanged sentences

Other, net ( 14 ) 4

Net cash used in financing activities

( 215 ) ( 2,955 )

Net cash provided by (used in) financing activities

Effect of foreign exchange rates on cash and cash equivalents 1 —

1 unchanged sentence

Cash and cash equivalents at beginning of period 8,288 6,526

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

Cash and cash equivalents at end of period $ 7,500 $ 6,226

14 unchanged sentences

— — — — 236 1 237

Repurchase and retirement of common stock, including excise tax ( 1.1 ) — ( 44 ) ( 525 ) — — ( 569 )

Dividends and dividend equivalents — — — ( 382 ) — — ( 382 )

Issuance of common stock under employee stock plans, net of related tax benefits 0.5 — 59 — — — 59

March 31, 2024 232.5 2 8,883 33,088 ( 1,365 ) 102 40,710

Net income — — — 2,300 — 1 2,301

Other comprehensive loss

— — — — ( 22 ) — ( 22 )

Noncontrolling interests adjustment — — — — — 4 4

2 unchanged sentences

Issuance of common stock under employee stock plans, net of related tax benefits 0.4 — 52 — — — 52

June 30, 2024 231.9 2 9,001 34,575 ( 1,387 ) 106 42,297

Net income (loss)

— — — 1,016 — ( 8 ) 1,008

Other comprehensive income

— — — — 898 — 898

Noncontrolling interest adjustment — — — — — 6 6

Repurchase and retirement of common stock, including excise tax

( 0.1 ) — ( 5 ) ( 55 ) — — ( 60 )

Dividends and dividend equivalents — — — ( 379 ) — — ( 379 )

Issuance of common stock under employee stock plans, net of related tax benefits 0.1 — 109 — — — 109

September 30, 2024 231.9 $ 2 $ 9,105 $ 35,157 $ ( 489 ) $ 104 $ 43,879

Elevance Health, Inc.

Consolidated Statements of Changes in Equity (continued)

Total Shareholders’ Equity

Common Stock Additional

Capital Retained

Earnings Accumulated

Comprehensive

Loss Noncontrolling

Interests Total

(In millions) Number of

March 31, 2025 225.7 $ 2 $ 8,866 $ 34,546 $ ( 911 ) $ 117 $ 42,620

December 31, 2023

1 unchanged sentence

— — — 2,246 — 3 2,249

Other comprehensive income — — — — 440 2 442

Repurchase and retirement of common stock, including excise tax

( 1.3 ) — ( 51 ) ( 575 ) — — ( 626 )

Dividends and dividend equivalents — — — ( 354 ) — — ( 354 )

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

0.4 — 6 — — — 6

Convertible debenture repurchases, conversions and tax adjustments

— — ( 342 ) — — — ( 342 )

March 31, 2023 237.1 2 8,697 30,707 ( 2,050 ) 104 37,460

— — — 1,853 — 3 1,856

Other comprehensive loss — — — — ( 52 ) — ( 52 )

— — — — ( 116 ) — ( 116 )

Repurchase and retirement of common stock, including excise tax

3 unchanged sentences

0.5 — 59 — — — 59

June 30, 2023 235.9 2 8,761 31,608 ( 2,166 ) 107 38,312

— — — 1,289 — 11 1,300

Other comprehensive loss — — — — ( 346 ) ( 2 ) ( 348 )

Repurchase and retirement of common stock

( 1.1 ) — ( 40 ) ( 445 ) — — ( 485 )

Dividends and dividend equivalents

— — — ( 349 ) — — ( 349 )

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

0.1 — 109 — — — 109

September 30, 2023 234.9 $ 2 $ 8,830 $ 32,103 $ ( 2,512 ) $ 116 $ 38,539

March 31, 2024 232.5 $ 2 $ 8,883 $ 33,088 $ ( 1,365 ) $ 102 $ 40,710

See accompanying notes.

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Notes to Consolidated Financial Statements

September 30, 2024

March 31, 2025

(In Millions, Except Per Share Data or As Otherwise Stated Herein)

2 unchanged sentences

Elevance Health is a health company with the purpose of improving the health of humanity.

We are one of the largest health insurers in the United States in terms of medical membership, serving nearly 46 million medical members through our affiliated health plans as of September 30, 2024.

As a lifetime, trusted health partner, we offer a broad spectrum of network-based managed care risk-based plans to Individual, Employer Group, Medicaid and Medicare markets.

We are one of the largest health insurers in the United States in terms of medical membership, serving approximately 45.8 million medical members through our affiliated health plans as of March 31, 2025.

We offer a broad spectrum of network-based managed care risk-based plans to Individual, Employer Group, Medicaid and Medicare markets.

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 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 Employees Program ®.

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 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.

Through various subsidiaries, we also offer pharmacy services through our CarelonRx business, and other healthcare-related services as Carelon Insights, Carelon Health and Carelon Behavioral Health.

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 brands and capabilities, including our CarelonRx and Carelon Services businesses, under a single brand name.

Our portfolio consists of 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 Medicare, Medicaid, and commercial Health Benefit plans;

• Wellpoint — represents our Wellpoint branded Medicare, Medicaid and commercial Health Benefit plans and other non-BCBSA brands;

• Carelon — represents our healthcare related services and capabilities, including our CarelonRx and Carelon Services businesses.

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).

During the fourth quarter of 2023, we moved our Carelon Global Solutions international business 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.

For additional discussion regarding our segments, including the changes made, see Note 15, “Segment Information” included in this Quarterly Report on Form 10-Q.

For additional information on reportable segments see Note 15, “Segment Information.”

Basis of Presentation and Significant Accounting Policies

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Accordingly, they do not include all the information and footnotes required by GAAP for annual financial statements.

We have omitted certain footnote disclosures that would substantially duplicate the disclosures in our Annual Report on Form 10-K for the year ended December 31, 2023 (the “2023 Annual Report on Form 10-K”), unless the information contained in those disclosures materially changed or is required by GAAP.

In the opinion of management, all adjustments, including normal recurring adjustments, necessary for a fair statement of the consolidated financial statements as of and for the three and nine months ended September 30, 2024 and 2023 have been recorded.

The results of operations for the three and nine months ended September 30, 2024 are not necessarily indicative of the results that may be expected for the full year ending December 31, 2024, or any other period.

We have omitted certain footnote disclosures that would substantially duplicate the disclosures in our Annual Report on Form 10-K for the year ended

December 31, 2024 (the “2024 Annual Report on Form 10-K”), unless the information contained in those disclosures materially changed or is required by GAAP.

In the opinion of management, all adjustments, including normal recurring adjustments, necessary for a fair statement of the consolidated financial statements as of and for the three months ended March 31, 2025 and 2024 have been recorded.

The results of operations for the three months ended March 31, 2025 are not necessarily indicative of the results that may be expected for the full year ending December 31, 2025, or any other period.

The seasonal nature of portions of our healthcare and related benefits business, as well as competitive and other market conditions, may cause full-year results to differ from estimates based upon our interim results of operations.

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The net effect of these translation adjustments is included in “Foreign currency translation adjustments” in our consolidated statements of comprehensive income.

Reclassifications:

Certain prior year amounts have been reclassified to conform to the current year presentation.

Cash and Cash Equivalents:

We control a number of bank accounts that are used exclusively to hold customer funds for the administration of customer benefits, and we have cash and cash equivalents on deposit to meet certain regulatory requirements.

These amounts totaled $ 339 and $ 294 at September 30, 2024 and December 31, 2023, respectively, and are included in the “Cash and cash equivalents” line on our consolidated balance sheets.

These amounts totaled $ 695 and $ 409 at March 31, 2025 and December 31, 2024, respectively, and are included in the “Cash and cash equivalents” line on our consolidated balance sheets.

We classify fixed maturity securities in our investment portfolio as “available-for-sale” and report those securities at fair value.

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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 (loss) 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 we are deemed to exercise control, or we are considered the primary beneficiary of a variable interest entity.

Investment income is recorded when earned.

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The allowance for doubtful accounts is based on historical collection trends, future forecasts and our judgment regarding the ability to collect specific accounts.

Premium receivables include the uncollected amounts from employer risk-based groups, individuals and government programs for insurance services.

Premium receivables are reported net of an allowance for doubtful accounts of $ 185 and $ 212 at September 30, 2024 and December 31, 2023, respectively.

Premium receivables include the uncollected amounts from insured groups, individuals and government programs.

Premium receivables are reported net of an allowance for doubtful accounts of $ 178 and $ 183 at March 31, 2025 and December 31, 2024, respectively.

Self-funded receivables include administrative fees, claims and other amounts due from fee-based customers for administrative services.

Self-funded receivables are reported net of an allowance for doubtful accounts of $ 89 and $ 87 at September 30, 2024 and December 31, 2023, respectively.

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 $ 1,140 and $ 941 at September 30, 2024 and December 31, 2023, respectively.

Self-funded receivables are reported net of an allowance for doubtful accounts of $ 128 and $ 115 at March 31, 2025 and December 31, 2024, 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 to us.

These receivables are reported net of an allowance for doubtful accounts of $ 1,458 and $ 1,385 at March 31, 2025 and December 31, 2024, respectively.

Revenue Recognition:

For our non-risk-based contracts, we had no material contract assets, contract liabilities or deferred contract costs recorded on our consolidated balance sheet at September 30, 2024 or December 31, 2023.

For the three and nine months ended September 30, 2024 and 2023, revenue recognized from performance obligations related to prior periods, such as changes in transaction price, were not material.

Premiums for risk-based contracts are recognized as revenue over the period insurance coverage is provided, and, if applicable, net of amounts recognized for rebates based on medical loss ratio, or regulatory requirements.

Premiums may also include performance incentives and penalties, which are recognized based on contractual terms.

We estimate amounts receivable and payable under these contractual terms, and to the extent that such estimated amounts vary from the final amounts paid, the adjustments are included in earnings in the period of final settlement.

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

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.

Additionally, delays in annual premium rate changes from contracted government agencies require that we defer the recognition of any increases to the period in which the premium rates become final.

The value of the impact can be significant in the period in which it is recognized depending on the magnitude of the premium rate increase, the membership to which it applies and the length of the delay between the effective date of the rate increase and the final contract date.

Premium rate decreases are recognized in the period the change in premium rate becomes effective and the change in the rate is known, which may be prior to the period when the contract amendment affecting the rate is finalized.

We also record premiums for certain value-based arrangements of our Carelon Services care delivery businesses.

Under these value-based arrangements, we carry financial responsibility across medical claims costs through risk contracts with health plans in which we deliver, integrate, direct and control certain health care services for patients.

In exchange, we receive a premium that is typically paid on a per-patient per-month basis and performance-based payments that are recognized when performance metrics are achieved.

We consider these value-based arrangements to represent a single performance obligation where revenues are recognized in the period in which health care services are made available.

Service fees include revenue from certain group contracts that provide for the group to be at risk for all, or with supplemental insurance arrangements, a portion, of their claims experience.

We charge these fee-based groups an administrative fee, which is based on the number of members in a group and the group’s claim experience.

In addition, service fees include amounts received for the administration of Medicare, certain other government programs, and administrative services arrangements of our Carelon subsidiaries.

Generally, each fee-based arrangement includes services which constitute a single suite of services provided and for which consideration is based upon an agreed-upon rate, regardless of the amount of services provided in a given period.

As with premiums, each fee-based arrangement may include terms with retroactive rate or membership adjustments, performance incentives and penalties, each of which is a form of variable consideration within the transaction price.

As such, each fee-based arrangement contains a single performance obligation that constitutes a series, and revenue is recognized over time as the services are performed.

All benefit payments under these programs are excluded from benefit expense.

The determination of whether services are distinct performance obligations that should be accounted for separately or combined as one unit of accounting may require significant judgment.

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 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.

Product revenues and costs of goods sold for our affiliated health plans are eliminated in consolidation, excluding co-payments and subsidies made by or on behalf of affiliated customers.

Product revenue for pharmacy services is recognized using the gross method at the negotiated contract price when CarelonRx has concluded that it is the principal, and it controls the services before prescription drugs are transferred to the customer.

CarelonRx determined it is the principal due to its contractual rights to design and develop a listing of prescription drugs offered to the customer (formulary management);

its control over establishing the pharmacy network available to the customer to have its prescription fulfilled (network management);

and its discretion over establishing the pricing for prescription drugs.

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

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.

For our non-risk-based contracts, we had no material contract assets, contract liabilities or deferred contract costs recorded on our consolidated balance sheet at March 31, 2025 or December 31, 2024.

For the three months ended March 31, 2025 and 2024, revenue recognized from performance obligations related to prior periods, such as changes in transaction price, were 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.

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In November 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update No.

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

Effective Date and Early Application (“ASU 2020-11”).

The amendments in ASU 2020-11 changed the effective date and early application of Accounting Standards Update No.

2018-12, Financial Services—Insurance (Topic 944):

Targeted Improvements to the Accounting for Long-Duration Contracts , which was issued in November 2018.

The amendments in ASU 2020-11 extended the original effective date by one year to our interim and annual reporting periods beginning after December 15, 2022.

This standard requires us to review cash flow assumptions for our long-duration insurance contracts at least annually and recognize the effect of changes in future cash flow assumptions in net income.

This standard also requires us to update discount rate assumptions quarterly and recognize the effect of changes in these assumptions in other comprehensive income.

The rate used to discount our reserves for future policy benefits is based on an estimate of the yield for an upper-medium grade fixed-income instrument with a duration profile matching that of our liabilities.

In addition, this standard changes the amortization method for deferred acquisition costs.

We adopted these amendments on January 1, 2023, using the modified retrospective transition method for changes to the liability for future policy benefits and deferred acquisition costs as of the transition date, January 1, 2021.

The adoption did not have an overall material impact on our financial statements.

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.

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.

We adopted ASU 2023-07 as of January 1, 2024.

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

Recent Accounting Guidance Not Yet Adopted:

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

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.

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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.

ASU 2023-09 is effective for our fiscal year beginning after December 15, 2024, however, these disclosures are not required for interim periods.

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.

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.

We do not believe the adoption of ASU 2023-07 will have a material impact on our consolidated financial statements or disclosures.

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

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Business Acquisitions and Divestitures

Investments in Joint Ventures and Completed Acquisitions

On August 6, 2024, we made an investment of $ 2,580 , consisting of cash and the net put option discussed in Note 6 "Derivative Financial Instruments", that resulted in our minority interest ownership of approximately 35 % of Augusta Topco Holdings, L.P.

(“Mosaic Health”), 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 Inc.

(“CMSI Assets”), a Carelon Health business, and two CD&R portfolio businesses, apree health and Millennium Physician Group (see Note 5, “Investments”).

Completed Acquisitions

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 March 31, 2025, 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 $ 451 to goodwill.

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

As of March 31, 2025, 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 March 31, 2025, 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 $ 1,756 to goodwill.

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

As of March 31, 2025, 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.

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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 September 30, 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 $ 751 to goodwill.

As of March 31, 2025, the purchase price was allocated to the tangible and intangible net assets acquired based on 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.

Since closing and during the measurement period we have adjusted goodwill by $( 30 ).

As of September 30, 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 February 15, 2023, we completed our acquisition of BioPlus Parent, LLC and subsidiaries (“BioPlus”) from CarepathRx Aggregator, LLC.

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

BioPlus, which operates as part of CarelonRx, seeks to connect payors and providers of specialty pharmaceuticals to meet the medication therapy needs of patients with complex medical conditions.

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 September 30, 2024, the purchase price was allocated to the tangible and intangible net assets acquired based on management’s estimates of their fair values, of which $ 820 has been allocated to finite-lived intangible assets and $ 893 to goodwill.

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

The accounting for the acquisition was finalized as of March 31, 2024.

As of March 31, 2025, the accounting for the acquisition is finalized.

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

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 , net of a contingent purchase price adjustment of $( 39 ) in the three months ended September 30, 2024.

(“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 .

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 nine months ending September 30, 2024 were not material.

Pending Acquisitions

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”).

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.

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

On October 15, 2024, we entered into an agreement to acquire RSV QOZB LTSS, Inc.

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

This acquisition aligns with Carelon Service's 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.

The acquisition is expected to close in the fourth quarter of 2024 or first quarter of 2025 and is subject to standard closing conditions and customary approvals.

Business Optimization Initiatives

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 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.

Actions to be taken under the 2023-2024 Business Efficiency Program were substantially finalized as of September 30, 2024.

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

In the third quarter of 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 right-of-use assets and other property and equipment.

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

The ending balances related to the total liabilities for employee termination costs under the 2023-2024 Business Efficiency Program at September 30, 2024 and December 31, 2023 were $ 267 and $ 191 , respectively.

During the nine months ended September 30, 2024, there were $ 165 in charges recorded related to employee termination costs under the 2023-2024 Business Efficiency Program, and payments were $ 89 .

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

Business Optimization Initiative

In 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, except as to cash outlays related to personnel-related costs associated with this program, which are expected to be paid through 2025.

The ending liability balances related to the employee termination costs under the 2023-2024 Business Efficiency Program at March 31, 2025 and December 31, 2024 were $ 190 and $ 224 , respectively.

During the three months ended March 31, 2025, there were no charges recorded related to employee termination costs under the 2023-2024 Business Efficiency Program, and payments were $ 34 .

Fixed Maturity Securities

We evaluate our available-for-sale fixed maturity securities for declines based on qualitative and quantitative factors.

We have established an allowance for credit loss and recorded credit loss expense as a reflection of our expected impairment losses.

We continue to review our investment portfolios under our impairment review policy.

Given the inherent uncertainty of changes in market conditions and the significant judgments involved, there is a continuing risk that declines in fair value may occur and additional material impairment losses for credit losses on investments may be recorded in future periods.

A summary of current and long-term fixed maturity securities, available-for-sale, at September 30, 2024 and December 31, 2023 is as follows:

A summary of current and long-term fixed maturity securities, available-for-sale, at March 31, 2025 and December 31, 2024 is as follows:

Losses Allowance

Losses Estimated

September 30, 2024

March 31, 2025

Fixed maturity securities:

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Total fixed maturity securities $ 26,928 $ 284 $ ( 970 ) $ ( 6 ) $ 26,236

Other asset-backed securities primarily consists of collateralized loan obligations and other debt securities.

Allowances for credit losses have been recorded in the amount of $ 2 and $ 4 at September 30, 2024 and December 31, 2023, respectively, for declines in fair value due to unfavorable changes in the credit quality characteristics that impact our assessment of collectability of principal and interest.

For fixed maturity securities in an unrealized loss position at September 30, 2024 and December 31, 2023, the following table summarizes the aggregate fair values and gross unrealized losses by length of time those securities have continuously been in an unrealized loss position:

Other asset-backed securities primarily consist of collateralized loan obligations and other debt securities.

For fixed maturity securities in an unrealized loss position at March 31, 2025 and December 31, 2024, the following table summarizes the aggregate fair values and gross unrealized losses by length of time those securities have continuously been in an unrealized loss position:

Less than 12 Months 12 Months or Greater

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Fair Value Gross

September 30, 2024

March 31, 2025

Fixed maturity securities:

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Foreign government securities

1 — — 2 4 ( 1 )

States, municipalities and political subdivisions, tax-exempt 471 1,026 ( 25 ) 618 864 ( 90 )

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Total fixed maturity securities 2,559 $ 9,213 $ ( 218 ) 3,886 $ 6,649 $ ( 752 )

Unrealized losses on our securities shown in the table above have not been recognized into income because, as of September 30, 2024, we do not intend to sell these investments and it is likely that we will not be required to sell these investments prior to their maturity or anticipated recovery.

The declines in fair values are largely due to increasing interest rates driven by the higher rate of inflation and other market conditions.

The amortized cost and fair value of fixed maturity securities at September 30, 2024, by contractual maturity, are shown below.

Unrealized losses on our securities shown in the table above have not been recognized into income because, as of March 31, 2025, we do not intend to sell these investments and it is likely that we will not be required to sell these investments prior to their anticipated recovery.

The declines in fair values are largely due to elevated interest rates driven by the higher rate of inflation and other market conditions.

Allowances for credit losses have been recorded in the amount of $ 7 and $ 6 at March 31, 2025 and December 31, 2024, respectively, for declines in fair value due to unfavorable changes in the credit quality characteristics that impact our assessment of collectability of principal and interest.

The amortized cost and fair value of fixed maturity securities at March 31, 2025, by contractual maturity, are shown below.

Expected maturities may differ from contractual maturities because the issuers of the securities may have the right to prepay obligations.

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Total fixed maturity securities $ 26,883 $ 26,497

During the three and nine months ended September 30, 2024, we received total proceeds from sales, maturities, calls or redemptions of fixed maturity securities of $ 3,870 and $ 12,284 , respectively.

During the three and nine months ended September 30, 2023, we received total proceeds from sales, maturities, calls or redemptions of fixed maturity securities of $ 6,236 and $ 21,321 , respectively.

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

(i) changes in the investment environment;

(ii) expectation that the fair value could deteriorate further;

(iii) desire to reduce exposure to an issuer or an industry;

(iv) changes in credit quality;

or (v) changes in expected cash flow.

All securities sold resulting in investment gains and losses are recorded on the trade date.

Realized gains and losses are determined on the basis of the cost or amortized cost of the specific securities sold.

Equity Securities

A summary of marketable equity securities at September 30, 2024 and December 31, 2023 is as follows:

September 30, 2024 December 31, 2023

A summary of current equity securities at March 31, 2025 and December 31, 2024 is as follows:

March 31, 2025 December 31, 2024

Equity securities:

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Other Invested Assets

Other invested assets include primarily our investments in limited partnerships, joint ventures and other non-controlled corporations, mortgage loans and 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.

Financial information for certain of these investments is reported on a one or three month lag due to the timing of when we receive financial information from the companies.

As discussed in Note 3, during the three months ended September 30, 2024, we made an initial investment in Mosaic Health which is accounted for as an equity method investment.

Including all direct transaction costs, our investment was $ 2,580 , representing approximately 35 % of Mosaic Health ownership.

Our additional contribution of the CMSI Assets to Mosaic Health is subject to certain closing conditions and customary approvals and is expected to be made in the fourth quarter of 2024 or first quarter of 2025.

The CMSI Assets, along with certain other unrelated assets planned to be divested, are included under the captions “Assets held for sale” and “Liabilities held for sale” in our consolidated balance sheet as of September 30, 2024.

At March 31, 2025, “Other invested assets” include non-controlled joint ventures, including our minority interest ownership of approximately 40 % 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 investment 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 Inc.

(“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.

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 revolving credit facility of up to $ 500 to Mosaic Health.

Net amounts receivable under these arrangements were $ 188 at September 30, 2024, which is included under the caption “Other noncurrent assets” in our consolidated balance sheets as of September 30, 2024.

Investment (Losses) and Gains

Net investment (losses) and gains for the three and nine months ended September 30, 2024 and 2023 are as follows:

Net amounts receivable under these arrangements were $ 188 at both March 31, 2025 and December 31, 2024, which are included under the caption “Other noncurrent assets” in our consolidated balance sheets as of March 31, 2025 and December 31, 2024.

During the three months ended March 31, 2025, we recognized $ 4 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.

In addition, during the quarter ended March 31, 2025, in the normal course of business, Mosaic provided care delivery and enablement services to Elevance Health subsidiaries amounting to $ 175 , reported in benefit expense.

In January 2023, we made an equity investment consisting of cash and a net put option 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 $ 93 and $ 87 was disbursed as of March 31, 2025 and December 31, 2024, respectively.

The mandatorily redeemable preferred equity in Liberty Dental is included in the caption “Other invested assets” in our consolidated balance sheets at March 31, 2025 and December 31, 2024.

Dividend income recognized from the financing arrangement during the three months ended March 31, 2025 and the year ended December 31, 2024 was not material.During the quarter ended March 31, 2025, in the normal course of business, Liberty Dental provided administrative services to our Medicare Advantage members under a capitated arrangement amounting to $ 146 , reported in benefit expense.

Investment Gains (Losses)

Net investment gains (losses) for the three months ended March 31, 2025 and 2024 are as follows:

Three Months Ended

September 30 Nine Months Ended

2024 2023 2024 2023

Net (losses) gains:

Net gains (losses):

Fixed maturity securities:

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Gross realized losses from sales ( 82 ) ( 159 )

Impairment (losses) gains recognized in income

( 9 ) 2 ( 13 ) ( 8 )

Impairment losses recognized in income

Net realized losses from sales of fixed maturity securities ( 55 ) ( 139 )

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Net realized (losses) gains recognized on equity securities sold during the period

( 3 ) 2 ( 4 ) 5

Net gains on equity securities

Net gains (losses) on equity securities

Other investments:

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Gross losses ( 94 ) ( 20 )

Impairment losses recognized in income ( 98 ) ( 8 ) ( 124 ) ( 37 )

Net (losses) gains on other investments

Other realized losses recognized in income

( 311 ) ( 25 )

Net losses on other investments

( 400 ) ( 29 )

Net losses on investments $ ( 462 ) $ ( 166 )

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.

In achieving this goal, assets may be sold to take advantage of market conditions or other investment opportunities as well as tax considerations.

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

(i) changes in the investment environment;

(ii) expectations that the fair value could deteriorate further;

(iii) desire to reduce exposure to an issuer or an industry;

(iv) changes in credit quality;

or (v) changes in expected cash flow.

Total proceeds from sales, maturities, calls or redemptions of fixed maturity securities were $ 3,338 and $ 5,401 during the three months ended March 31, 2025 and 2024, respectively.

Accrued Investment Income

At September 30, 2024 and December 31, 2023, accrued investment income totaled $ 300 and $ 301 , respectively.

At March 31, 2025 and December 31, 2024, accrued investment income totaled $ 268 and $ 287 , respectively.

We recognize accrued investment income under the caption “Other receivables” on our consolidated balance sheets.

Securities Lending Programs

We participate in securities lending programs whereby marketable securities in our investment portfolio are transferred to independent brokers or dealers in exchange for cash and securities collateral.

The fair value of the collateral received at the time of the transactions amounted to $ 2,538 and $ 2,380 at September 30, 2024 and December 31, 2023, respectively.

The value of the collateral represented 102 % of the market value of the securities on loan at each of September 30, 2024 and December 31, 2023.

The fair value of the cash and securities received as collateral for securities loaned at March 31, 2025 and December 31, 2024 was $ 2,596 and $ 2,305 , respectively.

The collateral received was 102 % of the market value of the loaned securities at each of March 31, 2025 and December 31, 2024.

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 September 30, 2024 and December 31, 2023, the remaining contractual maturity of our securities lending agreements included overnight and continuous transactions of cash for $ 2,320 and $ 2,255 , respectively, United States Government securities for $ 218 and $ 99 , respectively, and residential mortgage-backed securities for $ 0 and $ 26 , respectively.

At March 31, 2025 and December 31, 2024, the remaining contractual maturities of our securities lending transactions included overnight and continuous transactions of cash for $ 2,402 and $ 2,115 , respectively, United States Government securities for $ 194 and $ 176 , respectively, and residential mortgage-backed securities for $ 0 and $ 14 , respectively.

Derivative Financial Instruments

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We primarily invest in the following types of derivative financial instruments:

interest rate swaps, futures, forward contracts, put and call options, swaptions, embedded derivatives and warrants.

interest rate swaps, futures, forward contracts, put and call options, collars, swaptions, embedded derivatives and warrants.

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

At March 31, 2025 and December 31, 2024, we had posted collateral of $ 14 and $ 142 , respectively, related to our derivative financial instruments.

We have entered into various interest rate swap contracts to convert a portion of our interest rate exposure on our long-term debt from fixed rates to floating rates.

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Any amounts recognized for changes in fair value of these derivatives are included in the captions “Other current assets,” “Other noncurrent assets,” “Other current liabilities” or “Other noncurrent liabilities” in our consolidated balance sheets, as applicable.

The unrecognized loss for all expired and terminated cash flow hedges included in “Accumulated other comprehensive loss”, was $ 203 and $ 211 at September 30, 2024 and December 31, 2023, respectively.

During the three and nine months ended months ended September 30, 2024 , we recognized net gains of $ 1 and $ 8 , respectively, on non-hedging derivatives.

During the three and nine months ended September 30, 2023 , we recognized net gains of $ 13 and net losses of $ 3 on non-hedging derivatives, respectively.

The unrecognized loss for all expired and terminated cash flow hedges included in accumulated other comprehensive loss, net of tax, was $ 199 and $ 201 at March 31, 2025 and December 31, 2024, respectively.

During the three months ended March 31, 2025 , we recognized net gains of $ 1 and net losses of $( 3 ), respectively, on non-hedging derivatives.

During the three months ended March 31, 2024 , we recognized net gains of $ 11 and net losses of $( 6 ) on non-hedging derivatives, respectively.

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.

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

The net put option’s preliminary estimated 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 sheet as of September 30, 2024.

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

The net put option’s estimated 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 March 31, 2025 and 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.

In connection with our equity investment in Liberty Dental (see Note 5, “Investments”), we entered into an agreement with the majority owners that provides for certain rights and obligations of each party, including certain put and call options.

These options, if exercised, will result in our purchase of the units held by the majority owners as early as 2026 but no later than 2027 at a price based on certain multiples of earnings of Liberty Dental, 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.

On March 28, 2025, the terms of the put and call options were substantially amended.

The previous net put option liability of $ 85 at December 31, 2024 was extinguished and we recognized a new net put option liability at its estimated fair value of $ 396 which is included under the caption “Other noncurrent liabilities” in our consolidated balance sheets as of March 31, 2025.

The change in value was recognized through net losses on financial instruments in our consolidated statement of income.

For additional information relating to the fair value of our derivative assets and liabilities, see Note 7, “Fair Value,” included in this Quarterly Report on Form 10-Q.

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For a description of the methods and assumptions that are used to estimate and determine the fair value hierarchy classification for each class of financial instruments, see Note 7, “Fair Value,” to our audited consolidated financial statements as of and for the year ended December 31, 2024 included in Part II, Item 8 of our 2024 Annual Report on Form 10-K.

A summary of fair value measurements by level for assets and liabilities measured at fair value on a recurring basis at September 30, 2024 and December 31, 2023 is as follows:

A summary of fair value measurements by level for assets and liabilities measured at fair value on a recurring basis at March 31, 2025 and December 31, 2024 is as follows:

Level I Level II Level III Total

September 30, 2024

March 31, 2025

Cash equivalents $ 3,489 $ — $ — $ 3,489

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Total liabilities $ — $ ( 150 ) $ — $ ( 150 )

There were no individually material transfers into or out of Level III during the three and nine months ended September 30, 2024 or 2023.

There were no adjustments to quoted market prices obtained from the pricing services during the three and nine months ended September 30, 2024 or 2023.

There were no individually material transfers into or out of Level III during the three months ended March 31, 2025 or 2024.

There were no adjustments to quoted market prices obtained from the pricing services during the three months ended March 31, 2025 or 2024.

Certain assets and liabilities are measured at fair value on a nonrecurring basis;

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

As disclosed in Note 3, “Business Acquisitions and Divestitures,” we completed our acquisition of Paragon in the first quarter of 2024 and BioPlus in the first quarter of 2023.

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

As disclosed in Note 3, “Business Acquisitions and Divestitures,” we completed our acquisition of Centers and CareBridge in December 2024 and Paragon in March 2024.

The net assets acquired in our acquisitions of Centers, CareBridge and Paragon, and resulting goodwill and other intangible assets were recorded at fair value primarily using Level III inputs.

The majority of tangible assets acquired and liabilities assumed were recorded at their carrying values as of the acquisition date, 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 Paragon and BioPlus were internally estimated based on the income approach.

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

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

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

The fair values of goodwill and other intangible assets acquired in our acquisition of Paragon were finalized as of March 31, 2025 and were calculated based on the income approach.

In 2024, we entered into a limited partnership and related agreements which included certain put and call options on our minority interest ownership of Mosaic Health.

Also, in 2023, we entered into a limited liability company agreement which included certain put and call options on our minority interest ownership of Project Freedom Holdings, LLC, which is the ultimate parent of Liberty Dental Plan Corporation (“Liberty Dental”).

The resulting net put option liabilities were recorded at their fair value measured at the date of acquisition using Level III inputs based on a Monte Carlo simulation, which relies on assumptions including cash flow projections, risk-free rates, volatility and details specific to the options.

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

Other than the assets acquired and liabilities assumed in our acquisitions of Paragon and BioPlus and the net put options on Mosaic Health and Liberty Dental, there were no material assets or liabilities measured at fair value on a nonrecurring basis during the three and nine months ended September 30, 2024 or 2023.

Also, in 2023, we entered into a limited liability company agreement which included certain put and call options on our minority interest ownership of Liberty Dental.The net put option liabilities were recorded at their fair value measured at the date of acquisition using Level III inputs based on a Monte Carlo simulation, which relies on assumptions including cash flow projections, risk-free rates, volatility and details specific to the options.

We have elected to not mark the net put options to market.

As discussed in Note 6, “Derivatives”, on March 28, 2025, the terms of the Liberty Dental put and call options were substantially amended.

The previous net put option liability was extinguished and we recognized a new net put option liability at its estimated fair value of $ 396 .

The extinguished net put option estimated fair value was $ 543 at December 31, 2024.

Other than the assets acquired and liabilities assumed in our acquisitions of Centers, CareBridge and Paragon and the net put options on Mosaic Health and Liberty Dental, there were no material assets or liabilities measured at fair value on a nonrecurring basis during the three months ended March 31, 2025 or 2024.

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

Non-financial instruments such as 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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See Note 7, “Fair Value,” to our audited consolidated financial statements as of and for the year ended December 31, 2024 included in Part II, Item 8 of our 2024 Annual Report on Form 10-K for details on the methods and assumptions used to estimate the fair value for each class of financial instruments that are recorded at their carrying value in our consolidated balance sheets.

A summary of the estimated fair values by level for each class of financial instruments that are recorded at their carrying value on our consolidated balance sheets at September 30, 2024 and December 31, 2023 is as follows:

A summary of the estimated fair values by level for each class of financial instruments that is recorded at its carrying value on our consolidated balance sheets at March 31, 2025 and December 31, 2024 is as follows:

Value Estimated Fair Value

Level I Level II Level III Total

September 30, 2024

March 31, 2025

Other invested assets $ 657 $ — $ — $ 634 $ 634

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Notes 29,753 — 27,586 — 27,586

Options 1,726 — — 1,726 1,726

December 31, 2024

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Notes 30,867 — 28,460 — 28,460

During the three months ended September 30, 2024 and 2023, we recognized income tax expense of $ 365 an d $ 354 , respectively, which represent effective income tax rates of 26.6 % and 21.4 %, respectively.

During the nine months ended September 30, 2024 and 2023 , we recognized income tax expense of $ 1,740 an d $ 1,554 , respectively, which represent effective income tax rates of 23.8 % and 23.1 %, respectively.

The increase in our effective income tax rate from the three and nine months ended September 30, 2023 was primarily due to an increase in reserves for uncertain tax positions.

Income taxes receivable totaled $ 312 and $ 543 at September 30, 2024 and December 31, 2023, respectively.

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

1,415 — — 1,873 1,873

During the three months ended March 31, 2025 and 2024, we recognized income tax expense of $ 613 an d $ 690 , respectively, which represent effective income tax rates of 21.9 % and 23.5 %, respectively.

The decrease in our effective income tax rate from the three months ended March 31, 2024 was primarily due to favorable resolutions of uncertain tax positions and certain investment credits.

We recognized income taxes receivable of $ 63 and $ 213 as an asset under the caption “Other current assets” and income taxes payable of $ 267 and $ 75 as a liability under the caption “Other current liabilities” in our consolidated balance sheets as of March 31, 2025 and December 31, 2024, respectively.

Medical Claims Payable

A reconciliation of the beginning and ending balances for medical claims payable for the nine months ended September 30, 2024 and 2023 is as follows:

A reconciliation of the beginning and ending balances for medical claims payable for the three months ended March 31, 2025 and 2024 is as follows:

Gross medical claims payable, beginning of period $ 15,580 $ 15,865

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Net medical claims payable, beginning of period 15,567 15,858

Business combinations and purchase adjustments ( 85 ) —

Net incurred medical claims:

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Gross medical claims payable, end of period $ 16,529 $ 16,183

At September 30, 2024, the total of net incurred but not reported liabilities plus expected development on reported claims was $ 285 , $ 1,396 and $ 13,495 for the claim years 2022 and prior, 2023 and 2024, respectively.

The favorable development recognized in the nine months ended September 30, 2024 resulted from faster than expected development of completion factors from the latter part of 2023 as well as trend factors in late 2023 developing more favorably than originally expected.

The favorable development recognized in the nine months ended September 30, 2023 resulted primarily from trend factors in late 2022 developing more favorably than expected.

Favorable development in the completion factors resulting from the latter part of 2022 developing faster than expected also contributed.

The reconciliation of net incurred medical claims to benefit expense included in our consolidated statements of income for the nine months ended September 30, 2024 and 2023 is as follows:

At March 31, 2025, the total of net incurred but not reported liabilities plus expected development on reported claims was $ 11,835 , $ 3,979 and $ 701 for the claim years 2025, 2024, and 2023 and prior, respectively.

The favorable development recognized in the three months ended March 31, 2025 resulted from faster than expected development of completion factors from the latter part of 2024 as well as smaller but significant contribution from trend factors in late 2024 developing more favorably than originally expected.

The favorable development recognized in the three months ended March 31, 2024 resulted from faster than expected development of completion factors during the latter part of 2023, as well as trend factors in late 2023 developing more favorably than originally expected.

The reconciliation of net incurred medical claims to benefit expense included in our consolidated statements of income for the three months ended March 31, 2025 and 2024 is as follows:

Net incurred medical claims with medical claims payable

$ 33,349 $ 29,503

Performance-based arrangements without medical claims payable

Total net incurred medical claims

34,288 29,503

Quality improvement and other claims expense 1,024 1,043

Benefit expense $ 35,312 $ 30,546

The reconciliation of the medical claims payable reflected in the tables above to the consolidated ending balance for medical claims payable included in the consolidated balance sheet, as of September 30, 2024 is as follows:

Net incurred medical claims under certain performance-based risk arrangements that include gain or loss sharing components do not require a medical claim payable liability.

Net medical claims payable, end of period $ 16,515

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Insurance lines other than short duration 283

Liabilities held for sale

Gross medical claims payable, end of period $ 16,812

We generally issue senior unsecured notes for long-term borrowing purposes.

At September 30, 2024 and December 31, 2023, we had $ 26,763 and $ 24,870 , respectively, outstanding under these 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.

We intend to use 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 $ 800 outstanding balance of our 3.500 % senior unsecured notes.

We have an unsecured surplus note with an outstanding principal balance of $ 25 at both September 30, 2024 and December 31, 2023.

At March 31, 2025 and December 31, 2024, we had $ 29,728 and $ 30,842 , respectively, outstanding under these notes.

We have an unsecured surplus note with an outstanding principal balance of $ 25 at both March 31, 2025 and December 31, 2024.

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

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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 September 30, 2024, our debt-to-capital ratio, as defined and calculated under the 5 -Year Facility, was 38.2 %.

As of March 31, 2025, our debt-to-capital ratio, as defined and calculated under the 5 -Year Facility, was 41.3 %.

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

As of September 30, 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 nine months ended September 30, 2024 or during the twelve months ended December 31, 2023.

As of March 31, 2025, 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 three months ended March 31, 2025 or during the year ended December 31, 2024.

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

We had no amounts outstanding under this program at both September 30, 2024 and December 31, 2023.

We had no amounts outstanding under this program at both March 31, 2025 and December 31, 2024.

We are a member, through certain subsidiaries, of the Federal Home Loan Bank of Indianapolis, the Federal Home Loan Bank of Cincinnati, the Federal Home Loan Bank of Atlanta and the Federal Home Loan Bank of New York (collectively, the “FHLBs”).

As a member, we have the ability to obtain short-term cash advances, subject to certain minimum collateral requirements.

We had $ 360 and $ 225 of outstanding short-term borrowings from the FHLBs at September 30, 2024 and December 31, 2023, respectively.

All debt is a direct obligation of Elevance Health, Inc., except for the FHLBs borrowings.

We had $ 250 and $ 365 of outstanding short-term borrowings from the FHLBs at March 31, 2025 and December 31, 2024, respectively.

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

Commitments and Contingencies

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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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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 heard by a panel of the United States Court of Appeals for the Eleventh Circuit in September 2023 (the “Eleventh Circuit”), 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 ultimate amount paid by us under the Subscriber Settlement Agreement was $ 604 .

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.

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Blue Cross Blue Shield Association, et al.

2:22-cv-00261-RDP (N.D.

, No 1:21-cv-23448 (S.D.

and VHS Liquidating Trust v.

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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.

On February 14, 2025, the VHS plaintiffs amended their complaint to add an additional plaintiff, Children’s Hospital of Los Angeles.

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

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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.

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

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.

If 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.

I n 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.

A Final Fairness hearing is scheduled for July 29, 2025.

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 15, “Segment Information”).

Express Scripts, Inc.

PBM Litigation

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

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

Express Scripts, Inc.

, in the U.S.

District Court for the Southern District of New York (the “District Court”).

The lawsuit sought to recover over $ 14,800 in damages for pharmacy pricing that is higher than competitive benchmark pricing under the agreement between the parties (the “ESI Agreement”), over $ 158 in damages related to operational breaches, as well as various declarations under the ESI Agreement, including that Express Scripts:

(i) breached its obligation to negotiate in good faith and to agree in writing to new pricing terms (the “Pricing Claim”);

(ii) was required to provide competitive benchmark pricing to us through the term of the ESI Agreement;

(iii) has breached the ESI Agreement;

and (iv) is required under the ESI Agreement to provide post-termination services, at competitive benchmark pricing, for one year following any termination.

Express Scripts disputed our contractual claims and it sought declaratory judgments:

(i) regarding the timing of the periodic pricing review under the ESI Agreement, and (ii) that it has no obligation to ensure that we receive any specific level of pricing, that we have no contractual right to any change in pricing under the ESI Agreement and that its sole obligation is to negotiate proposed pricing terms in good faith.

In the alternative, Express Scripts claimed that we have been unjustly enriched by its payment of $ 4,675 at the time we entered into the ESI Agreement.

In March 2017, the District Court granted our motion to dismiss Express Scripts’ counterclaims for (i) breach of the implied covenant of good faith and fair dealing, and (ii) unjust enrichment with prejudice.

After such ruling, Express Scripts’ only remaining claims were for breach of contract and declaratory relief.

In August 2021, Express Scripts filed a motion for summary judgment, which we opposed.

In March 2022, the District Court granted in part and denied in part Express Scripts’ motion for summary judgment.

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 Quarterly Report on Form 10-Q 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.

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 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.

We submitted our appellant brief in April 2024.

Briefing was completed in August 2024, and oral arguments before the Second Circuit are scheduled for October 2024.

The ultimate outcome of this appeal cannot be presently determined.

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

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

however, their ultimate outcome cannot be presently determined.

Medicare Risk Adjustment Litigation

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

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

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

The DOJ’s suit alleges, among other things, that we falsely certified the accuracy of the diagnosis data we submitted to the Centers for Medicare and Medicaid Services (“CMS”) for risk-adjustment purposes under Medicare Part C and knowingly failed to delete inaccurate diagnosis codes.

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Fact discovery is ongoing.

In July 2024, the District Court issued a scheduling order setting the deadlines for the completion of fact discovery in February 2025 and October 2025 for the completion of expert discovery.

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;

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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 at September 30, 2024 is approximately $ 2,107 .

Our remaining commitment under this agreement is approximately $ 1,961 .

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, as well as infusion services and injectable therapies.

CarelonRx delegates certain core pharmacy services to CaremarkPCS Health, L.L.C.

(“CVS”), which is a subsidiary of CVS Health Corporation, pursuant to an agreement that is set to terminate on December 31, 2025.

In the first quarter of 2024, CarelonRx began assuming responsibility from CVS for pharmacy mail order front-end intake.

(“CVS”), which is a subsidiary of CVS Health Corporation, pursuant to an agreement (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 $ 894 as of March 31, 2025.

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

We have unfunded loan commitments to certain equity investees of $ 501 at March 31, 2025.

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

Vulnerability Concentrations

Financial instruments that potentially subject us to concentrations of credit risk consist primarily of cash equivalents, investment securities, premium receivables and instruments held through hedging activities.

All investment securities are managed by professional investment managers within policies authorized by our Board of Directors.

Such policies limit the

amounts that may be invested in any one issuer and prescribe certain investee company criteria.

Concentrations of credit risk with respect to premium receivables are limited due to the large number of employer groups that constitute our customer base in the states in which we conduct business.

As of March 31, 2025, there were no significant concentrations of financial instruments in a single investee, industry or geographic location.

Capital Stock

Use of Capital – Dividends and Stock Repurchase Program

We regularly review the appropriate use of capital, including acquisitions, common stock and debt security repurchases and dividends to shareholders.

The declaration and payment of any dividends or repurchases of our common stock or debt is at the discretion of our Board of Directors and depends upon our financial condition, results of operations, future liquidity needs, regulatory and capital requirements and other factors deemed relevant by our Board of Directors.

A summary of our cash dividend activity for the nine months ended September 30, 2024 and 2023 is as follows:

Declaration Date Record Date Payment Date Cash

Nine Months Ended September 30, 2024

January 23, 2024 March 8, 2024 March 22, 2024 $ 1.63 $ 379

April 16, 2024 June 10, 2024 June 25, 2024 $ 1.63 $ 378

July 16, 2024 September 10, 2024 September 25, 2024 $ 1.63 $ 378

Nine Months Ended September 30, 2023

January 24, 2023 March 10, 2023 March 24, 2023 $ 1.48 $ 351

April 18, 2023 June 9, 2023 June 23, 2023 $ 1.48 $ 350

July 18, 2023 September 8, 2023 September 22, 2023 $ 1.48 $ 348

On October 15, 2024, our Audit Committee declared a fourth quarter 2024 dividend to shareholders of $ 1.63 per share, payable on December 20, 2024 to shareholders of record at the close of business on December 5, 2024.

Under our Board of Directors’ authorization, we maintain a 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.

As of October 15, 2024, $ 11,111 was available for repurchase under the program.

No duration has been placed on the common stock repurchase program, and we reserve the right to discontinue the program at any time.

Repurchases may be made from time to time at prevailing market prices, subject to certain restrictions on volume, pricing and timing.

The repurchases are effected from time to time in the open market, through negotiated transactions, including accelerated share repurchase agreements, and through plans designed to comply with Rule 10b5-1 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”).

Our stock repurchase program is discretionary, as we are under no obligation to repurchase shares.

We repurchase shares under the program when we believe it is a prudent use of capital.

The excess cost of the repurchased shares over par value is charged on a pro rata basis to additional paid-in capital and retained earnings.

A summary of common stock repurchases for the nine months ended September 30, 2024 and 2023 is as follows:

Nine Months Ended September 30

Shares repurchased 2.1 3.8

Average price per share $ 506.80 $ 462.42

Aggregate cost $ 1,089 $ 1,748

Authorization remaining at the end of the period $ 3,111 $ 5,128

For additional information regarding the use of capital for debt security repurchases, see Note 10, “Debt,” included in this Quarterly Report on Form 10-Q and Note 13, “Debt,” to our audited consolidated financial statements as of and for the year ended December 31, 2023 included in Part II, Item 8 of our 2023 Annual Report on Form 10-K.

Stock Incentive Plan s

A summary of stock option activity for the nine months ended September 30, 2024 is as follows:

A summary of stock option activity for the three months ended March 31, 2025 is as follows:

Shares Weighted-

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Exercised ( 0.1 ) 209.75

Forfeited or expired ( 0.1 ) 452.26

Outstanding at September 30, 2024 2.9 361.50 5.91 $ 462

Exercisable at September 30, 2024 1.9 299.01 4.70 $ 424

A summary of the status of nonvested restricted stock activity, including restricted stock units and performance units, for the nine months ended September 30, 2024 is as follows:

Outstanding at March 31, 2025 3.4 371.80 6.28 $ 264

Exercisable at March 31, 2025 2.2 339.92 4.92 $ 239

A summary of the status of nonvested restricted stock activity, including restricted stock units and performance units, for the three months ended March 31, 2025 is as follows:

and Units Weighted-

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Vested ( 0.4 ) 465.96

Forfeited ( 0.1 ) 475.21

Nonvested at September 30, 2024 1.0 478.61

During the nine months ended September 30, 2024, we granted approximately 0.2 restricted stock units that are contingent upon us achieving earnings targets over the three-year period from 2024 to 2026.

These grants have been included in the activity shown above but will be subject to adjustment at the end of 2026 based on results in the three-year period.

Nonvested at March 31, 2025 1.2 442.07

During the three months ended March 31, 2025, we granted approximately 0.2 restricted stock units that are contingent upon us achieving earnings targets over the three-year period from 2025 to 2027.

These grants have been included in the activity shown above but will be subject to adjustment at the end of 2027 based on results during the three-year period.

We use a binomial lattice valuation model to estimate the fair value of all stock options granted.

For a more detailed discussion of our stock incentive plan fair value methodology, see Note 15, “Capital Stock,” to our audited consolidated financial statements as of and for the year ended December 31, 2024 included in Part II, Item 8 of our 2024 Annual Report on Form 10-K.

The following weighted-average assumptions were used to estimate the fair values of options granted during the nine months ended September 30, 2024 and 2023:

Nine Months Ended September 30

The following weighted-average assumptions were used to estimate the fair values of options granted during the three months ended March 31, 2025 and 2024:

Three Months Ended March 31

Risk-free interest rate 4.29 % 4.28 %

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Weighted-average expected life (years) 4.45 4.40

The following weighted-average fair values per option or share were determined for the nine months ended September 30, 2024 and 2023:

Nine Months Ended September 30

The following weighted-average fair values per option or share were determined for the three months ended March 31, 2025 and 2024:

Three Months Ended March 31

Options granted during the period $ 107.31 $ 134.53

Restricted stock awards granted during the period 395.49 499.00

Use of Capital – Dividends and Stock Repurchase Program

We regularly review the appropriate use of capital, including acquisitions, common stock and debt security repurchases and dividends to shareholders.

A summary of our cash dividend activity for the three months ended March 31, 2025 and 2024 is as follows:

Declaration Date Record Date Payment Date Cash

Three Months Ended March 31, 2025

January 22, 2025 March 10, 2025 March 25, 2025 $ 1.71 $ 386

Three Months Ended March 31, 2024

January 23, 2024 March 8, 2024 March 22, 2024 $ 1.63 $ 379

On April 16, 2025, our Audit Committee declared a second quarter 2025 dividend to shareholders of $ 1.71 per share, payable on June 25, 2025 to shareholders of record at the close of business on June 10, 2025.

Under our Board of Directors’ authorization, we maintain a 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 the common stock repurchase program, and we reserve the right to discontinue the program at any time.

Repurchases may be made from time to time at prevailing market prices, subject to certain restrictions on volume, pricing and timing.

Our stock repurchase program is discretionary, as we are under no obligation to repurchase shares.

We repurchase shares under the program when we believe it is a prudent use of capital.

The excess cost of the repurchased shares over par value is charged on a pro rata basis to additional paid-in capital and retained earnings.

A summary of common stock repurchases for the three months ended March 31, 2025 and 2024 is as follows:

Three Months Ended March 31

Shares repurchased 2.2 1.1

Average price per share $ 395.78 $ 492.76

Aggregate cost $ 880 $ 566

Authorization remaining at the end of the period $ 8,420 $ 3,633

We expect to utilize the remaining authorized amount over a multi-year period, subject to market and industry conditions.

For additional information regarding the use of capital for debt security repurchases, see Note 10, “Debt,” included in this Quarterly Report on Form 10-Q and Note 13, “Debt,” to our audited consolidated financial statements as of and for the year ended December 31, 2024 included in Part II, Item 8 of our 2024 Annual Report on Form 10-K.

Accumulated Other Comprehensive (Loss) Income

A reconciliation of the components of accumulated other comprehensive (loss) income at September 30, 2024 and 2023 is as follows:

Three Months Ended

September 30 Nine Months Ended

2024 2023 2024 2023

A reconciliation of the components of accumulated other comprehensive (loss) income at March 31, 2025 and 2024 is as follows:

Net unrealized investment (losses) gains:

Beginning of period balance $ ( 523 ) $ ( 632 )

Other comprehensive income (loss) before reclassifications, net of tax benefit (expense) of $( 263 ), $ 145 , $( 189 ) and $ 119 , respectively

841 ( 464 ) 595 ( 317 )

Amounts reclassified from accumulated other comprehensive income, net of tax benefit of $( 17 ), $( 35 ), $( 65 ) and $( 86 ), respectively

46 112 210 273

Other comprehensive income (loss) before reclassifications, net of tax (expense) benefit of ($ 60 ) and $ 50 respectively

Amounts reclassified from accumulated other comprehensive income, net of tax expense of ($ 13 ) and ($ 33 ) respectively

Other comprehensive income (loss) 235 ( 56 )

Other comprehensive income attributable to noncontrolling interests, net of tax benefit (expense) of $ 0 , $( 1 ), $ 0 and $( 1 ), respectively

Other comprehensive loss attributable to noncontrolling interests, net of tax benefit of $ 0 and $ 0 respectively

End of period balance ( 289 ) ( 688 )

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Beginning of period balance ( 2 ) ( 3 )

Other comprehensive income (loss), net of tax expense of $ 0 , $( 1 ), $ 0 and $ 0 , respectively

Other comprehensive income, net of tax expense of $ 0 and $ 0 respectively

End of period balance ( 1 ) ( 3 )

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Beginning of period balance ( 207 ) ( 211 )

Other comprehensive income, net of tax benefit (expense) of $ 0 , $( 1 ), $( 2 ) and $ 6 , respectively

Other comprehensive income, net of tax expense of ($ 3 ) and ($ 1 ) respectively

End of period balance ( 202 ) ( 209 )

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Beginning of period balance ( 399 ) ( 459 )

Other comprehensive income, net of tax expense of $( 1 ), $ 0 , $( 3 ) and $( 2 ), respectively

Other comprehensive (loss) income, net of tax expense of ($ 8 ) and ($ 1 ) respectively

End of period balance ( 404 ) ( 455 )

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Beginning of period balance 8 10

Other comprehensive income (loss), net of tax benefit of $ 0 , $ 0 , $ 0 and $ 0 , respectively

( 1 ) 3 ( 2 ) 2

Other comprehensive loss, net of tax benefit of $ 0 and $ 0 respectively

End of period balance 8 8

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Beginning of period balance ( 24 ) ( 18 )

Other comprehensive income (loss), net of tax benefit of $ 0 , $ 1 , $ 0 and $ 0 , respectively

7 ( 4 ) 2 ( 2 )

Other comprehensive income, net of tax expense of $ 0 and $ 0 respectively

End of period balance ( 23 ) ( 18 )

Total beginning of period accumulated other comprehensive loss ( 1,147 ) ( 1,313 )

Total other comprehensive (loss) income, net of tax expense of $( 281 ), $ 109 , $( 259 ), and $ 37 , respectively

898 ( 348 ) 824 ( 22 )

Total other comprehensive loss attributable to noncontrolling interests, net of tax benefit (expense) of $ 0 , $( 1 ), $ 0 and $( 1 ) respectively

Total other comprehensive income (loss), net of tax (expense) benefit of ($ 84 ) and $ 15 respectively

Total other comprehensive loss attributable to noncontrolling interests, net of tax benefit of $ 0 and $ 0 respectively

Total end of period accumulated other comprehensive loss $ ( 911 ) $ ( 1,365 )

Shareholders' Earnings per Share

The denominator for basic and diluted shareholders' earnings per share for the three and nine months ended September 30, 2024 and 2023 is as follows:

Three Months Ended

September 30 Nine Months Ended

2024 2023 2024 2023

The denominator for basic and diluted shareholders' earnings per share for the three months ended March 31, 2025 and 2024 is as follows:

Denominator for basic shareholders' earnings per share – weighted-average shares

231.9 235.3 232.3 236.4

Effect of dilutive securities – employee stock options, nonvested restricted stock awards and convertible debentures

1.2 1.2 1.3 1.6

Effect of dilutive securities – employee stock options, non-vested restricted stock awards and convertible debentures

Denominator for diluted shareholders' earnings per share

233.1 236.5 233.6 238.0

During the three months ended September 30, 2024 and 2023, weighted-average shares related to certain stock options of 0.5 and 0.9 respectively, were excluded from the denominator for diluted shareholders' earnings per share because the stock options were anti-dilutive.

During the nine months ended September 30, 2024 and 2023, weighted-average shares related to certain stock options of 0.5 and 0.8 , respectively, were excluded from each of the denominators for diluted earnings per share because the stock options were anti-dilutive.

During the three and nine months ended September 30, 2024, we issued approximately 0.0 and 0.6 restricted stock units under our stock incentive plans, 0.0 and 0.2 of which vesting is contingent upon us meeting specified annual earnings targets for the three-year period of 2024 through 2026.

During the three and nine months ended September 30, 2023, we issued approximately 0.0 and 0.6 restricted stock units under our stock incentive plans, 0.0 and 0.2 of which vesting is contingent upon us meeting specified annual earnings targets for the three-year period of 2023 through 2025.

The contingent restricted stock units have been excluded from the denominators for diluted shareholders' earnings per share and will be included only if and when the contingency is met.

During the three months ended March 31, 2025 and 2024, weighted-average shares related to certain stock options of 1.5 and 0.6 , respectively, were excluded from the denominator for diluted shareholders' earnings per share because the stock options were anti-dilutive.

We have issued approximately 0.6 cumulative restricted stock units under our stock incentive plans, of which vesting is contingent upon us meeting specified annual 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.

These contingent restricted stock units are being measured over a three-year period and generally vest in March of the year following each measurement period.

Segment Information

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Health Benefits, CarelonRx, Carelon Services and Corporate & Other.

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.

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;

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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, as well as infusion services and injectable therapies.

Our Carelon Services segment 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, 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 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 premium income, product revenue and service fees.

Operating revenues are derived from premiums and fees received, primarily from the sale and administration of health benefits and pharmacy products and services.

We define operating revenues to include premiums, product revenue and service fees.

Operating revenues are derived from premiums and fees received, primarily from the sale and administration of health benefits and pharmacy products and

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.

Financial data by reportable segment for the three and nine months ended September 30, 2024 and 2023 is as follows:

Benefits CarelonRx Carelon

Services Total Corporate

& Other Eliminations Total

Three Months Ended September 30, 2024

Premiums $ 36,448 $ — $ 680 $ 680 $ — $ ( 319 ) $ 36,809

Product revenue — 5,887 — 5,887 — — 5,887

Service fees 1,830 2 201 203 ( 10 ) — 2,023

Operating revenue - unaffiliated 38,278 5,889 881 6,770 ( 10 ) ( 319 ) 44,719

Operating revenue - affiliated — 3,254 3,757 7,011 84 ( 7,095 ) —

Operating revenue - total $ 38,278 $ 9,143 $ 4,638 $ 13,781 $ 74 $ ( 7,414 ) $ 44,719

Operating gain (loss) $ 1,604 $ 619 $ 184 $ 803 $ ( 999 ) $ — $ 1,408

Depreciation and amortization of property and equipment — — — — 231 — 231

Three Months Ended September 30, 2023

Premiums $ 34,934 $ — $ 422 $ 422 $ — $ ( 97 ) $ 35,259

Product revenue — 5,177 — 5,177 — — 5,177

Service fees 1,810 4 218 222 12 — 2,044

Operating revenue - unaffiliated 36,744 5,181 640 5,821 12 ( 97 ) 42,480

Operating revenue - affiliated — 3,337 2,869 6,206 83 ( 6,289 ) —

Operating revenue - total $ 36,744 $ 8,518 $ 3,509 $ 12,027 $ 95 $ ( 6,386 ) $ 42,480

Operating gain (loss) $ 1,834 $ 477 $ 192 $ 669 $ ( 747 ) $ — $ 1,756

Depreciation and amortization of property and equipment — — — — 220 — 220

Certain administrative costs related to affiliate services are charged to the operating segment receiving the benefits and the amounts may change over time.

These affiliated 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.

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.

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 three months ended March 31, 2025 and 2024 is as follows:

Benefits CarelonRx Carelon

1 unchanged sentence

& Other Eliminations Total

Nine Months Ended September 30, 2024

Three Months Ended March 31, 2025

Premiums $ 39,588 $ — $ 1,500 $ 1,500 $ — $ ( 201 ) $ 40,887

4 unchanged sentences

Operating revenue - total $ 41,431 $ 10,116 $ 6,536 $ 16,652 $ 165 $ ( 9,483 ) $ 48,765

Benefit expense

$ 34,393 $ — $ 5,319 $ 5,319 $ 10 $ ( 4,410 ) $ 35,312

Cost of products sold

— 9,284 — 9,284 — ( 4,301 ) $ 4,983

Operating expense

4,821 230 726 956 295 ( 772 ) 5,300

Operating gain (loss) $ 2,217 $ 602 $ 491 $ 1,093 $ ( 140 ) $ — $ 3,170

Depreciation and amortization of property and equipment — — — — 687 — 687

Nine Months Ended September 30, 2023

Three Months Ended March 31, 2024

Premiums $ 35,382 $ — $ 408 $ 408 $ — $ ( 94 ) $ 35,696

4 unchanged sentences

Operating revenue - total $ 37,258 $ 8,067 $ 4,009 $ 12,076 $ 127 $ ( 7,188 ) $ 42,273

Operating gain (loss)

Benefit expense

$ 30,500 $ — $ 3,010 $ 3,010 $ 10 $ ( 2,974 ) $ 30,546

Depreciation and amortization of property and equipment — — — — 659 — 659

For segment reporting, we present all capitated risk arrangements on a gross basis;

therefore, eliminations also include adjustments for affiliated and unaffiliated capitated risk arrangements that are recognized on a net basis under GAAP, as well as other affiliated eliminations.

A reconciliation of reportable segments’ operating revenue to the amounts of total revenues included in our consolidated statements of income for the three and nine months ended September 30, 2024 and 2023 is as follows:

Three Months Ended

September 30 Nine Months Ended

Cost of products sold

— 7,373 — 7,373 — ( 3,548 ) $ 3,825

Operating expense

4,471 171 709 880 201 ( 666 ) 4,886

Operating gain (loss) $ 2,287 $ 523 $ 290 $ 813 $ ( 84 ) $ — $ 3,016

A reconciliation of reportable segments’ operating revenue to the amounts of total revenues included in our consolidated statements of income for the three months ended March 31, 2025 and 2024 is as follows:

Three Months Ended

Reportable segments’ operating revenue 48,765 42,273

1 unchanged sentence

Net losses on financial instruments ( 464 ) ( 161 )

(Loss) gain on sale of business

( 39 ) — 201 —

Total revenues $ 48,891 $ 42,577

A reconciliation of income before income tax expense to reportable segments’ operating gain included in our consolidated statements of income for the three and nine months ended September 30, 2024 and 2023 is as follows:

A reconciliation of reportable segments' operating gain to income before income tax expense included in our consolidated statements of income for the three months ended March 31, 2025 and 2024 is as follows:

Three Months Ended

September 30 Nine Months Ended

2024 2023 2024 2023

Income before income tax expense 2,797 2,939

1 unchanged sentence

Net losses on financial instruments 464 161

Loss (gain) on sale of business

39 — ( 201 ) —

Interest expense 344 265

2 unchanged sentences

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-Q

Item 1. Financial Statements