What changed in this filing

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Item 1. Financial Statements

2025-10-21 compared with 2025-07-17 · 215 added, 199 removed, 867 unchanged (32% of the section changed)

2 unchanged sentences

Consolidated Balance Sheets

September 30,

2025 December 31,

6 unchanged sentences

Equity securities 1,220 1,192

Premium receivables 10,465 8,011

Self-funded receivables 5,454 5,044

Premium receivables, net

Self-funded receivables, net

Other receivables 7,692 6,016

45 unchanged sentences

Three Months Ended

June 30 Six Months Ended

September 30 Nine Months Ended

2025 2024 2025 2024

6 unchanged sentences

Net losses on financial instruments ( 1 ) ( 125 ) ( 596 ) ( 371 )

Gain on sale of business

Gain (loss) on sale of business

— ( 39 ) — 201

Total revenues 50,711 45,106 149,378 131,569

9 unchanged sentences

Net income 1,187 1,008 5,115 5,558

Net income attributable to noncontrolling interests

( 1 ) ( 1 ) ( 2 ) ( 4 )

Net loss attributable to noncontrolling interests

Shareholders’ net income $ 1,189 $ 1,016 $ 5,115 $ 5,562

7 unchanged sentences

Three Months Ended

June 30 Six Months Ended

September 30 Nine Months Ended

2025 2024 2025 2024

1 unchanged sentence

Net income $ 1,187 $ 1,008 $ 5,115 $ 5,558

Other comprehensive income (loss), net of tax:

Change in net unrealized gains (losses) on investments

148 ( 26 ) 383 ( 82 )

Other comprehensive income, net of tax:

Change in net unrealized gains on investments 220 887 603 805

Change in non-credit component of impairment losses on investments 1 — ( 1 ) —

( 3 ) — ( 2 ) —

Change in net unrealized gains (losses) on cash flow hedges

Change in net unrealized gains (losses) on net cash flow hedges ( 3 ) 2 5 8

Change in net periodic pension and postretirement costs 4 3 1 11

1 unchanged sentence

Foreign currency translation adjustments ( 1 ) 7 1 2

Other comprehensive income (loss)

152 ( 22 ) 389 ( 74 )

Other comprehensive income 219 898 608 824

Net loss attributable to noncontrolling interests 2 8 — 4

( 1 ) ( 1 ) ( 2 ) ( 4 )

Other comprehensive income attributable to noncontrolling interests ( 2 ) — ( 4 ) —

( 1 ) — ( 2 ) —

Total shareholders’ comprehensive income $ 1,406 $ 1,914 $ 5,719 $ 6,386

1 unchanged sentence

Elevance Health, Inc.

Consolidated Statements of Cash Flows

Six Months Ended

Consolidated Statements of Cash Flows (Unaudited)

Nine Months Ended

(In millions)

7 unchanged sentences

Deferred income taxes 43 ( 258 )

Impairment of property and equipment 70 103

Share-based compensation 246 220

7 unchanged sentences

Income taxes ( 13 ) 231

Other, net 26 57

Net cash provided by operating activities 4,206 5,102

9 unchanged sentences

Net cash used in investing activities ( 1,808 ) ( 3,529 )

( 584 ) ( 3,128 )

Financing activities

1 unchanged sentence

Repayments of long-term borrowings ( 2,150 ) ( 800 )

Proceeds from short-term borrowings 990 210

Repayments of short-term borrowings, net of issuances ( 1,175 ) ( 75 )

6 unchanged sentences

Other, net 10 9

Net cash provided by (used in) financing activities

Net cash used in financing activities

( 1,974 ) ( 215 )

32 unchanged sentences

June 30, 2025 224.8 $ 2 $ 8,931 $ 35,549 $ ( 760 ) $ 129 $ 43,851

Net income (loss) — — — 1,189 — ( 2 ) 1,187

Other comprehensive gain

— — — — 217 2 219

Repurchase and retirement of common stock, including excise tax ( 2.9 ) — ( 115 ) ( 769 ) — — ( 884 )

Dividends and dividend equivalents — — — ( 383 ) — — ( 383 )

Issuance of common stock under employee stock plans, net of related tax benefits 0.1 — 92 — — — 92

September 30, 2025 222.0 $ 2 $ 8,908 $ 35,586 $ ( 543 ) $ 129 $ 44,082

Elevance Health, Inc.

28 unchanged sentences

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

Net income — — — 1,016 — ( 8 ) 1,008

Other comprehensive gain

— — — — 898 — 898

Noncontrolling interests adjustment

— — — — — 6 6

Repurchase and retirement of common stock ( 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

See accompanying notes.

1 unchanged sentence

Notes to Consolidated Financial Statements

June 30, 2025

September 30, 2025

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

References to the terms “we,” “our,” “us” or “Elevance Health” used throughout these Notes to Consolidated Financial Statements refer to Elevance Health, Inc., an Indiana corporation, and unless the context otherwise requires, its direct and indirect subsidiaries.

References to the terms “we,” “our,” “us” or “Elevance Health” used throughout these Notes to the Consolidated Financial Statements refer to Elevance Health, Inc., an Indiana corporation, and unless the context otherwise requires, its direct and indirect subsidiaries.

References to the “states” include the District of Columbia and Puerto Rico unless the context otherwise requires.

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 approximately 45.6 million medical members through our affiliated health plans as of June 30, 2025.

We are one of the largest health insurers in the United States in terms of medical membership, serving approximately 45.4 million medical members through our affiliated health plans as of September 30, 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 Program ®.

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

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

19 unchanged sentences

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 and six months ended June 30, 2025 and 2024 have been recorded.

The results of operations for the three and six months ended June 30, 2025 are not necessarily indicative of the results that may be expected for the full year ending December 31, 2025, or any other period.

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, 2025 and 2024 have been recorded.

The results of operations for the three and nine months ended September 30, 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.

8 unchanged sentences

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 $ 519 and $ 409 at June 30, 2025 and December 31, 2024, respectively, and are included in the “Cash and cash equivalents” line on our consolidated balance sheets.

These amounts totaled $ 397 and $ 409 at September 30, 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.

39 unchanged sentences

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 $ 163 and $ 183 at June 30, 2025 and December 31, 2024, respectively.

Premium receivables are reported net of an allowance for doubtful accounts of $ 168 and $ 183 at September 30, 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 $ 134 and $ 115 at June 30, 2025 and December 31, 2024, respectively.

Self-funded receivables are reported net of an allowance for doubtful accounts of $ 109 and $ 115 at September 30, 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 $ 1,395 and $ 1,385 at June 30, 2025 and December 31, 2024, respectively.

During the quarter ended June 30, 2025, we realized a $ 209 settlement with a value-based care provider, which allowed us to release $ 129 from the allowance for doubtful accounts.

These receivables are reported net of an allowance for doubtful accounts of $ 1,470 and $ 1,385 at September 30, 2025 and December 31, 2024, respectively.

During the nine months ended September 30, 2025, we realized a $ 237 settlement with a value-based care provider, which allowed us to release $ 129 from the allowance for doubtful accounts.

Of the settlement amount, $ 154 pertains to services rendered in 2024, with the remaining $ 83 attributable to 2025.

32 unchanged sentences

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 June 30, 2025 or December 31, 2024.

For the three and six months ended June 30, 2025 and 2024, revenue recognized from performance obligations related to prior periods, such as changes in transaction price, were not material.

For our non-risk-based contracts, we had no material contract assets, contract liabilities or deferred contract costs recorded on our consolidated balance sheets at September 30, 2025 or December 31, 2024.

For the three and nine months ended September 30, 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.

Recently Adopted Accounting Guidance:

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

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

2023-05, Business Combinations—Joint Venture Formations (Subtopic 805-60):

8 unchanged sentences

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, however, these disclosures are not required for interim periods.

ASU 2023-09 is effective for our fiscal years 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 July 2025, the FASB issued Accounting Standards Update No.

2025-05, Financial Instruments—Credit Losses (Topic 326):

Measurement of Credit Losses for Accounts Receivable and Contract Assets (“ASU 2025-05”).

This standard introduces a practical expedient for all entities when estimating expected credit losses on current accounts receivable and contract assets arising from transactions under Accounting Standards Codification Topic (“ASC”) 606.

Under the practical expedient, entities may assume that conditions at the balance sheet date remain unchanged over the life of the asset, reducing the need to prepare complex macroeconomic forecasts for short-term balances.

ASU 2025-05 is effective for our fiscal years beginning after December 15, 2025, and interim periods within such fiscal years, with prospective application required.

Early adoption is permitted.

We are currently assessing the impact of ASU 2025-05 on our consolidated financial statements and related disclosures.

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

1 unchanged sentence

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.

This standard requires additional expense detail 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 years 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 September 2025, the FASB issued Accounting Standards Update No.

2025-06, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40):

Targeted Improvements to the Accounting for Internal-Use Software (“ASU 2025-06”).

This standard modernizes the accounting for internal-use software by removing references to prescriptive development stages and instead requiring capitalization of costs once (1) management has authorized and committed to funding the software project, and (2) it is probable the project will be completed and placed in service.

Entities must evaluate whether there is “significant development uncertainty,” such as unresolved novel functionality or substantially revised performance requirements, before meeting this capitalization threshold.

ASU 2025-06 is effective for our fiscal years beginning after December 15, 2027, and interim periods within such fiscal years, with early adoption permitted.

Entities may adopt the amendments prospectively, retrospectively, or under a modified transition approach.

We are currently evaluating the impact of ASU 2025-06 on our consolidated financial statements and related disclosures.

There were no other new accounting pronouncements that were issued or became effective since the issuance of our 2024 Annual Report on Form 10-K that had, or are expected to have, a material impact on our consolidated financial position, results of operations, cash flows or disclosures.

Business Acquisitions and Divestitures

Business Acquisitions

Completed Acquisitions

2 unchanged sentences

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

As of June 30, 2025, the purchase price was allocated to the tangible and intangible net assets acquired based on management's estimates of their fair values, of which $ 211 has been allocated to finite-lived intangible assets, $ 690 to indefinite-lived intangible assets and $ 285 to goodwill.

As of September 30, 2025, the purchase price was allocated to the tangible and intangible net assets acquired based on management's estimates of their fair values, of which $ 211 has been allocated to finite-lived intangible assets, $ 690 to indefinite-lived intangible assets and $ 246 to goodwill.

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

As of June 30, 2025, the initial accounting for the acquisition has not been finalized.

The proforma effects of this acquisition for prior periods along with revenue and net income for the six months ended June 30, 2025 were not material to our consolidated results of operations.

As of September 30, 2025, the initial accounting for the acquisition has not been finalized.

The proforma effects of this acquisition for prior periods along with revenue and net income for the three and nine months ended September 30, 2025 were not material to our consolidated results of operations.

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

1 unchanged sentence

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 June 30, 2025, the purchase price was allocated to the tangible and intangible net assets acquired based on management's estimates of their fair values, of which $ 305 has been allocated to finite-lived intangible assets, and $ 1,814 to goodwill.

As of September 30, 2025, the purchase price was allocated to the tangible and intangible net assets acquired based on management's estimates of their fair values, of which $ 305 has been allocated to finite-lived intangible assets, and $ 1,811 to goodwill.

The purchase price includes a contingent consideration payable with a fair value of $ 27 related to an earnout arrangement based on 2025 and 2026 earnings of CareBridge.

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

As of June 30, 2025, the initial accounting for the acquisition has not been finalized.

The proforma effects of this acquisition for prior periods along with revenue and net income for the six months ended June 30, 2025 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 $ 240 in the three months ended June 30, 2024.

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

The related net assets held for sale for the life and disability businesses that were divested and results of operations as of and for the six months ended June 30, 2024 were not material.

As of September 30, 2025, the initial accounting for the acquisition has not been finalized.

Business Optimization Initiative

2 unchanged sentences

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 June 30, 2025 and December 31, 2024 were $ 141 and $ 224 , respectively.

During the six months ended June 30, 2025, there were no charges recorded related to employee termination costs under the 2023-2024 Business Efficiency Program, and payments were $ 83 .

The ending liability balances related to the employee termination costs under the 2023-2024 Business Efficiency Program at September 30, 2025 and December 31, 2024 were $ 109 and $ 224 , respectively.

During the nine months ended September 30, 2025, $ 111 of payments were made, an d $ 4 was released from the liability.

Fixed Maturity Securities

A summary of current and long-term fixed maturity securities, available-for-sale, at June 30, 2025 and December 31, 2024 is as follows:

A summary of current and long-term fixed maturity securities, available-for-sale, at September 30, 2025 and December 31, 2024 is as follows:

Losses Allowance

Losses Estimated

June 30, 2025

September 30, 2025

Fixed maturity securities:

20 unchanged sentences

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

For fixed maturity securities in an unrealized loss position at June 30, 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:

For fixed maturity securities in an unrealized loss position at September 30, 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

5 unchanged sentences

Fair Value Gross

June 30, 2025

September 30, 2025

Fixed maturity securities:

13 unchanged sentences

Foreign government securities 2 15 ( 1 ) 2 2 ( 1 )

2 15 ( 1 ) 2 2 ( 1 )

States, municipalities and political subdivisions, tax-exempt 527 1,092 ( 22 ) 661 943 ( 101 )

1 unchanged sentence

Residential mortgage-backed securities 306 1,097 ( 25 ) 1,312 1,291 ( 211 )

306 1,097 ( 25 ) 1,312 1,291 ( 211 )

Commercial mortgage-backed securities 136 670 ( 15 ) 297 661 ( 45 )

136 670 ( 15 ) 297 661 ( 45 )

Other asset-backed securities 123 293 ( 9 ) 236 735 ( 83 )

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 June 30, 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.

Unrealized losses on our securities shown in the table above have not been recognized into income because, as of September 30, 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 $ 15 and $ 6 at June 30, 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 June 30, 2025, by contractual maturity, are shown below.

Allowances for credit losses have been recorded in the amount of $ 13 and $ 6 at September 30, 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 September 30, 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.

7 unchanged sentences

Equity Securities

A summary of current equity securities at June 30, 2025 and December 31, 2024 is as follows:

June 30, 2025 December 31, 2024

A summary of current equity securities at September 30, 2025 and December 31, 2024 is as follows:

September 30, 2025 December 31, 2024

Equity securities:

4 unchanged sentences

Other Invested Assets

At June 30, 2025, “Other invested assets” include non-controlled joint ventures, including our minority interest ownership of approximately 40 % of Augusta Topco Holdings, L.P.

At September 30, 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”).

5 unchanged sentences

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 both June 30, 2025 and December 31, 2024, which are included under the caption “Other noncurrent assets” in our consolidated balance sheets as of June 30, 2025 and December 31, 2024.

During the six months ended June 30, 2025, we recognized $ 9 in interest income from the financing arrangement with Mosaic Health.

Net amounts receivable under these arrangements were $ 188 at both September 30, 2025 and December 31, 2024, which are included under the caption “Other invested assets” in our consolidated balance sheets as of September 30, 2025 and December 31, 2024.

During the nine months ended September 30, 2025 and 2024, we recognized $ 13 and $ 3 , respectively, 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.

No additional funding has been provided as of June 30, 2025 or December 31, 2024.

In addition, during the three and six months ended June 30, 2025, in the normal course of business, Mosaic provided care delivery and enablement services to Elevance Health subsidiaries amounting to $ 171 and $ 346 , respectively, reported in benefit expense.

No additional funding was provided as of September 30, 2025 or December 31, 2024.

In addition, during the three and nine months ended September 30, 2025, in the normal course of business, Mosaic provided care delivery and enablement services to Elevance Health subsidiaries amounting to $ 162 and $ 662 , respectively, 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 healthcare 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 $ 146 and $ 87 was disbursed as of June 30, 2025 and December 31, 2024, respectively.

Mandatorily redeemable preferred equity in Liberty Dental of $ 118 and $ 87 is included in the caption “Other invested assets” in our consolidated balance sheets at June 30, 2025 and December 31, 2024, respectively.

Dividend income recognized from the financing arrangement during the six months ended June 30, 2025 and the year ended December 31, 2024 was not material.

During the three and six months ended June 30, 2025, in the normal course of business, Liberty Dental provided services to our Medicare Advantage members under a capitated arrangement amounting to $ 146 and $ 292 , respectively, reported in benefit expense.

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 $ 157 and $ 87 was disbursed as of September 30, 2025 and December 31, 2024, respectively.

Mandatorily redeemable preferred equity in Liberty Dental of $ 127 and $ 87 is included in the caption “Other invested assets” in our consolidated balance sheets at September 30, 2025 and December 31, 2024, respectively.

Dividend income recognized from the financing arrangement during the nine months ended September 30, 2025 and the year ended December 31, 2024 was not material.

During the three and nine months ended September 30, 2025, in the normal course of business, Liberty Dental provided services to our Medicare Advantage members under a capitated arrangement amounting to $ 149 and $ 441 , respectively, reported in benefit expense.

Investment Gains (Losses)

Net investment gains (losses) for the three and six months ended June 30, 2025 and 2024 are as follows:

Net investment gains (losses) for the three and nine months ended September 30, 2025 and 2024 are as follows:

Three Months Ended

June 30 Six Months Ended

September 30 Nine Months Ended

2025 2024 2025 2024

4 unchanged sentences

Impairment losses recognized in income — ( 9 ) ( 10 ) ( 13 )

( 9 ) ( 3 ) ( 10 ) ( 4 )

Net realized losses from sales of fixed maturity securities ( 12 ) ( 63 ) ( 117 ) ( 275 )

Equity securities:

Unrealized gains (losses) recognized on equity securities still held at the end of the period

— ( 2 ) ( 6 ) 1

Unrealized gains recognized on equity securities still held at the end of the period

Net realized losses recognized on equity securities sold during the period ( 7 ) ( 3 ) ( 9 ) ( 4 )

( 1 ) — ( 2 ) ( 1 )

Net losses on equity securities 1 — ( 7 ) —

( 1 ) ( 2 ) ( 8 ) —

Other investments:

2 unchanged sentences

Other realized losses recognized in income ( 17 ) ( 98 ) ( 411 ) ( 124 )

( 83 ) ( 1 ) ( 394 ) ( 26 )

Net losses on other investments 11 ( 63 ) ( 470 ) ( 104 )

( 81 ) ( 11 ) ( 480 ) ( 41 )

Net losses on investments $ — $ ( 126 ) $ ( 594 ) $ ( 379 )

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

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 to:

4 unchanged sentences

or (v) changes in expected cash flow.

During the three and six months ended June 30, 2025, we received total proceeds from sales, maturities, calls or redemptions of fixed maturity securities of $ 2,682 and $ 6,021 , respectively.

During the three and six months ended June 30, 2024, we received total proceeds from sales, maturities, calls or redemptions of fixed maturity securities of $ 3,014 and $ 8,414 , respectively.

During the three and nine months ended September 30, 2025, we received total proceeds from sales, maturities, calls or redemptions of fixed maturity securities of $ 2,738 and $ 8,759 , respectively.

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.

Accrued Investment Income

At June 30, 2025 and December 31, 2024, accrued investment income totaled $ 284 and $ 287 , respectively.

At September 30, 2025 and December 31, 2024, accrued investment income totaled $ 280 and $ 287 , respectively.

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

Securities Lending Programs

The fair value of the cash and securities received as collateral for securities loaned at June 30, 2025 and December 31, 2024 was $ 2,772 and $ 2,305 , respectively.

The collateral received was 102 % of the market value of the loaned securities at each of June 30, 2025 and December 31, 2024.

The fair value of the cash and securities received as collateral for securities loaned at September 30, 2025 and December 31, 2024 was $ 2,881 and $ 2,305 , respectively.

The collateral received was 102 % of the market value of the loaned securities at each of September 30, 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 June 30, 2025 and December 31, 2024, the remaining contractual maturities of our securities lending transactions included overnight and continuous transactions of cash for $ 2,377 and $ 2,115 , respectively, United States Government securities for $ 393 and $ 176 , respectively, and residential mortgage-backed securities for $ 2 and $ 14 , respectively.

At September 30, 2025 and December 31, 2024, the remaining contractual maturities of our securities lending transactions included overnight and continuous transactions of cash for $ 2,711 and $ 2,115 , respectively, United States Government securities for $ 170 and $ 176 , respectively, and residential mortgage-backed securities for $ 0 and $ 14 , respectively.

Derivative Financial Instruments

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

We received collateral of $ 56 and posted collateral of $ 142 related to our derivative financial instruments at June 30, 2025 and December 31, 2024, respectively.

We received collateral of $ 66 and posted collateral of $ 142 related to our derivative financial instruments at September 30, 2025 and December 31, 2024, respectively.

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, net of tax, for all expired and terminated interest rate cash flow hedges included in the consolidated statements of comprehensive income within the change in net unrealized gains (losses) on cash flow hedges was $ 196 and $ 201 at June 30, 2025 and December 31, 2024, respectively.

During the three and six months ended June 30, 2025 , we recognized net gains of $ 0 and net losses of $ 2 , respectively, on non-hedging derivatives.

During the three and six months ended June 30, 2024 , we recognized net gains of $ 2 and $ 7 on non-hedging derivatives, respectively.

The unrecognized loss, net of tax, for all expired and terminated interest rate cash flow hedges included in the consolidated statements of comprehensive income within the change in net unrealized gains (losses) on cash flow hedges was $ 195 and $ 201 at September 30, 2025 and December 31, 2024, respectively.

During the three and nine months ended September 30, 2025 , we recognized net gains of $ 0 and net losses of $ 2 , respectively, on non-hedging derivatives.

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

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 provide 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 carrying value of the net put option of $ 1,330 , which is a non-cash item measured at fair value at the date of our initial investment, is included under the caption “Other noncurrent liabilities” in our consolidated balance sheets as of June 30, 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.

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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 on March 28, 2025 of $ 396 , which is included under the caption “Other noncurrent liabilities” in our consolidated balance sheet as of June 30, 2025.

The carrying value of the net put option of $ 396 , which is a non-cash item measured at fair value at the date of our initial investment, is included under the caption “Other noncurrent liabilities” in our consolidated balance sheet as of September 30, 2025.

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

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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 June 30, 2025 and December 31, 2024 is as follows:

A summary of fair value measurements by level for assets and liabilities measured at fair value on a recurring basis at September 30, 2025 and December 31, 2024 is as follows:

Level I Level II Level III Total

June 30, 2025

September 30, 2025

Cash equivalents $ 3,219 $ — $ — $ 3,219

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

There were no individually material transfers into or out of Level III during the three and six months ended June 30, 2025 or 2024.

There were no adjustments to quoted market prices obtained from the pricing services during the three and six months ended June 30, 2025 or 2024.

There were no individually material transfers into or out of Level III during the three and nine months ended September 30, 2025 or 2024.

There were no adjustments to quoted market prices obtained from the pricing services during the three and nine months ended September 30, 2025 or 2024.

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

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

As discussed in Note 6, “Derivatives”, in August 2024, we entered into certain put, call, and purchase price true-up options in connection with our investment in Mosaic Health.

The net put option estimated fair value was $ 1,400 and $ 1,330 at June 30, 2025 and December 31, 2024, respectively.

As discussed in Note 6, “Derivatives”, in March 2025, we amended certain put, and call options in connection with our investment in Liberty Dental.

The net put option estimated fair value was $ 420 and $ 543 at June 30, 2025 and December 31, 2024, respectively.

Other than the assets acquired and liabilities assumed in our acquisitions of Centers and CareBridge 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 six months ended June 30, 2025 or 2024.

As discussed in Note 6, “Derivative Financial Instruments”, in August 2024, we entered into certain put, call, and purchase price true-up options in connection with our investment in Mosaic Health.

The net put option estimated fair value was $ 1,400 and $ 1,330 at September 30, 2025 and December 31, 2024, respectively.

As discussed in Note 6, “Derivative Financial Instruments”, in March 2025, we amended certain put, and call options in connection with our investment in Liberty Dental.

The net put option estimated fair value was $ 444 and $ 543 at September 30, 2025 and December 31, 2024, respectively.

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.

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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 is recorded at its carrying value on our consolidated balance sheets at June 30, 2025 and December 31, 2024 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 September 30, 2025 and December 31, 2024 is as follows:

Value Estimated Fair Value

Level I Level II Level III Total

June 30, 2025

September 30, 2025

Other invested assets $ 678 $ — $ — $ 660 $ 660

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Notes 30,867 — 28,460 — 28,460

1,415 — — 1,873 1,873

During the three months ended June 30, 2025 and 2024, we recognized income tax expense of $ 548 an d $ 685 , respectively, which represent effective income tax rates of 23.9 % and 22.9 %, respectively.

During the six months ended June 30, 2025 and 2024, we recognized income tax expense of $ 1,161 an d 1,375 , respectively, which represent effective income tax rates of 22.8 % and 23.2 %, respectively.

The increase in our effective income tax rate from the three months ended June 30, 2024 was primarily due to non-recurrence of a favorable resolution of an uncertain tax position recognized during the three months ended June 30, 2024.

The decrease in our effective income tax rate from the six months ended June 30, 2024 was primarily due to the impact of certain investment credits, partially offset by the non-recurrence of a favorable resolution of an uncertain tax position recognized during the prior period.

We recognized income taxes receivable of $ 200 and $ 213 as an asset under the caption “Other current assets” and income taxes payable of $ 665 and $ 75 as a liability under the caption “Other current liabilities” in our consolidated balance sheets as of June 30, 2025 and December 31, 2024, respectively.

Options 1,415 — — 1,873 1,873

During the three months ended September 30, 2025 and 2024, we recognized income tax expense of $ 219 an d $ 365 , respectively, which represent effective income tax rates of 15.6 % and 26.6 %, respectively.

During the nine months ended September 30, 2025 and 2024, we recognized income tax expense of $ 1,380 an d 1,740 , respectively, which represent effective income tax rates of 21.2 % and 23.8 %, respectively.

The decrease in our effective income tax rate compared to the three months ended September 30, 2024 was primarily due to the impact of certain investment credits and the non-recurrence of a prior year uncertain tax position recognized during the three months ended September 30, 2024.

The decrease in our effective income tax rate compared to the nine months ended September 30, 2024 was primarily due to the impact of certain investment credits.

We recognized income taxes receivable of $ 294 and $ 213 as an asset under the caption “Other current assets” and income taxes payable of $ 141 and $ 75 as a liability under the caption “Other current liabilities” in our consolidated balance sheets as of September 30, 2025 and December 31, 2024, respectively.

Medical Claims Payable

A reconciliation of the beginning and ending balances for medical claims payable for the six months ended June 30, 2025 and 2024 is as follows:

A reconciliation of the beginning and ending balances for medical claims payable for the nine months ended September 30, 2025 and 2024 is as follows:

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

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Gross medical claims payable, end of period $ 16,868 $ 15,185

At June 30, 2025, the total of net incurred but not reported liabilities plus expected development on reported claims was $ 14,154 , $ 2,247 and $ 454 for the claim years 2025, 2024, and 2023 and prior, respectively.

The favorable development recognized in the six months ended June 30, 2025 resulted from trend factors in late 2024 developing more favorably than originally expected as well as a smaller contribution from faster than expected development of completion factors from the latter part of 2024.

The favorable development recognized in the six months ended June 30, 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 six months ended June 30, 2025 and 2024 is as follows:

At September 30, 2025, the total of net incurred but not reported liabilities plus expected development on reported claims was $ 15,223 , $ 1,258 and $ 343 for the claim years 2025, 2024, and 2023 and prior, respectively.

The favorable development recognized in the nine months ended September 30, 2025 resulted from trend factors in late 2024 developing more favorably than originally expected as well as a smaller contribution from faster than expected development of completion factors from the latter part of 2024.

The favorable development recognized in the nine months ended September 30, 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 nine months ended September 30, 2025 and 2024 is as follows:

Net incurred medical claims with medical claims payable

$ 103,923 $ 91,105

Performance-based arrangements without medical claims payable

Performance-based risk arrangements without medical claims payable

Total net incurred medical claims

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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.

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 sheets, as of June 30, 2025 is as follows:

Net medical claims payable, end of period $ 16,824

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

At June 30, 2025 and December 31, 2024, we had $ 29,801 and $ 30,842 , respectively, outstanding under these notes.

At September 30, 2025 and December 31, 2024, we had $ 31,897 and $ 30,843 , respectively, outstanding under these notes.

On September 15, 2025, we issued $ 750 aggregate principal amount of 4.000 % Notes due 2028 (the “2028 Notes”), $ 750 aggregate principal amount of 4.600 % Notes due 2032 (the “2032 Notes”), $ 1,000 aggregate principal amount of 5.000 % Notes due 2036 (the “2036 Notes”), and $ 500 aggregate principal amount of 5.700 % Notes due 2055 (the “2055 Notes”, and, together with the 2028 Notes, the 2032 Notes and the 2036 Notes, the “Notes”) under our shelf registration statement.

Interest on the 2028 Notes, the 2032 Notes, and the 2055 Notes are payable semi-annually in arrears on March 15 and September 15 of each year, commencing March 15, 2026.

Interest on the 2036 Notes is payable semi-annually in arrears on January 15 and July 15 of each year, commencing January 15, 2026.

We used the net proceeds from the issuance of the Notes to redeem all of the $ 400 aggregate principal amount of our 5.350 % senior notes due 2025 and the $ 500 aggregate principal amount of our 4.900 % senior notes due 2026.

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

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

We have an unsecured surplus note with an outstanding principal balance of $ 25 at both June 30, 2025 and December 31, 2024.

We have an unsecured surplus note with an outstanding principal balance of $ 25 at both September 30, 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.

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

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

As of June 30, 2025, our debt-to-capital ratio, as defined and calculated under the 5 -Year Facility, was 40.8 %.

On September 5, 2025, we amended and restated the credit agreement for the 5 -Year Facility to, among other things, extend the maturity date of the 5 -Year Facility from April 2027 to September 2030 and increase the amount of credit available under the 5 -Year Facility from $ 4,000 to $ 5,000 .

As of September 30, 2025, our debt-to-capital ratio, as defined and calculated under the 5 -Year Facility, was 42.1 %.

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

As of June 30, 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 six months ended June 30, 2025 or during the year ended December 31, 2024.

As of September 30, 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 nine months ended September 30, 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 June 30, 2025 and December 31, 2024.

We had no amounts outstanding under this program at either September 30, 2025 or 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 $ 365 of outstanding short-term borrowings from the FHLBs at June 30, 2025 and December 31, 2024, respectively.

We had $ 180 and $ 365 of outstanding short-term borrowings from the FHLBs at September 30, 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.

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and VHS Liquidating Trust v.

Blue Cross of

California, et al.

Blue Cross of California, et al.

RG21106600 (Cal.

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however, their ultimate outcome cannot be presently determined.

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

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

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

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

American Express Co .

does not affect the standard of review in this case.

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

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

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

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

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

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”).

A Final Fairness Hearing was held in July 2025, and a Final Order of Approval was issued in August 2025.

As a result of the Final Order of Approval, the defendants were required to make a monetary settlement payment, our portion of which was $ 666 and was paid on September 19, 2025.

Ce rtain 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 are now being implemented on a timeline set forth in the Provider Settlement Agreement.

We recognized our payment obligation under the Provider Settlement Agreement of $ 666 in September 2024 as operating expense in the Corporate & Other segment (see Note 15, “Segment Information”).

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

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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.

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 & Medicaid Services (“CMS”) for risk-adjustment purposes under Medicare Part C and knowingly failed to delete inaccurate diagnosis codes.

The DOJ further alleges that, as a result of these purported acts, we caused CMS to calculate the risk-adjustment payments based on inaccurate diagnosis information, which enabled us to obtain unspecified amounts of payments in Medicare funds in violation of the False Claims Act.

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

Fact discovery is ongoing with a current deadline of October 9, 2025.

We expect that deadline to be extended.

Fact discovery is ongoing with a current deadline of December 9, 2025.

The final expert discovery deadline is currently June 18, 2026.

On October 1, 2025, the Chief Judge for the District Court issued a temporary Order of Stay of all civil cases (other than those for civil forfeiture) brought by the United States Attorney's Office for the Southern District of New York.

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

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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 $ 966 as of June 30, 2025.

We have financial guarantees related to standby letters of credit and surety bonds related to certain contractual commitments, which totaled $ 834 as of September 30, 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 June 30, 2025.

We have unfunded loan commitments to certain equity investees of $ 501 at September 30, 2025.

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

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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.

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 June 30, 2025, there were no significant concentrations of financial instruments in a single investee, industry or geographic location.

As of September 30, 2025, there were no significant concentrations of financial instruments in a single investee, industry or geographic location.

Capital Stock

Stock Incentive Plan s

A summary of stock option activity for the six months ended June 30, 2025 is as follows:

A summary of stock option activity for the nine months ended September 30, 2025 is as follows:

Shares Weighted-

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Exercised ( 0.2 ) 218.45

Outstanding at June 30, 2025 3.3 372.63 6.00 $ 169

Exercisable at June 30, 2025 2.2 341.60 4.66 $ 169

A summary of the status of nonvested restricted stock activity, including restricted stock units and performance units, for the six months ended June 30, 2025 is as follows:

Forfeited or expired ( 0.1 ) 436.11

Outstanding at September 30, 2025 3.2 373.18 5.86 $ 77

Exercisable at September 30, 2025 2.1 342.73 4.51 $ 77

A summary of the status of nonvested restricted stock activity, including restricted stock units and performance units, for the nine months ended September 30, 2025 is as follows:

and Units Weighted-

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Forfeited ( 0.1 ) 451.08

Nonvested at June 30, 2025 1.1 440.25

During the six months ended June 30, 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.

Nonvested at September 30, 2025 1.1 438.24

During the nine months ended September 30, 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.

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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 six months ended June 30, 2025 and 2024:

Six Months Ended June 30

The following weighted-average assumptions were used to estimate the fair values of options granted during the nine months ended September 30, 2025 and 2024:

Nine Months Ended September 30

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 six months ended June 30, 2025 and 2024:

Six Months Ended June 30

The following weighted-average fair values per option or share were determined for the nine months ended September 30, 2025 and 2024:

Nine Months Ended September 30

Options granted during the period $ 106.92 $ 134.65

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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 six months ended June 30, 2025 and 2024 is as follows:

A summary of our cash dividend activity for the nine months ended September 30, 2025 and 2024 is as follows:

Declaration Date Record Date Payment Date Cash

Six Months Ended June 30, 2025

Nine Months Ended September 30, 2025

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

April 16, 2025 June 10, 2025 June 25, 2025 $ 1.71 $ 385

Six Months Ended June 30, 2024

July 16, 2025 September 10, 2025 September 25, 2025 $ 1.71 $ 381

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

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

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

On October 15, 2025, our Audit Committee declared a fourth quarter 2025 dividend to shareholders of $ 1.71 per share, payable on December 19, 2025 to shareholders of record at the close of business on December 5, 2025.

Under our Board of Directors’ authorization, we maintain a common stock repurchase program.

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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 six months ended June 30, 2025 and 2024 is as follows:

Six Months Ended June 30

A summary of common stock repurchases for the nine months ended September 30, 2025 and 2024 is as follows:

Nine Months Ended September 30

Shares repurchased 6.1 2.1

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Accumulated Other Comprehensive (Loss) Income

A reconciliation of the components of accumulated other comprehensive (loss) income at June 30, 2025 and 2024 is as follows:

A reconciliation of the components of accumulated other comprehensive (loss) income at September 30, 2025 and 2024 is as follows:

Three Months Ended

Six Months Ended

September 30 Nine Months Ended

2025 2024 2025 2024

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Beginning of period balance $ ( 142 ) $ ( 714 ) $ ( 523 ) $ ( 632 )

Other comprehensive income (loss) before reclassifications, net of tax (expense) benefit of ($ 33 ), $ 26 , ($ 93 ), and $ 75 , respectively

Other comprehensive income before reclassifications, net of tax expense of ($ 63 ), ($ 263 ), ($ 156 ), and ($ 189 ), respectively

211 841 514 595

Amounts reclassified from accumulated other comprehensive income, net of tax expense of ($ 3 ), ($ 17 ), ($ 28 ) and ($ 65 ), respectively

Other comprehensive income (loss) 148 ( 26 ) 383 ( 82 )

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

Other comprehensive income

220 887 603 805

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

( 2 ) — ( 4 ) —

End of period balance 76 173 76 173

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Beginning of period balance ( 4 ) ( 3 ) ( 2 ) ( 3 )

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

( 3 ) — ( 2 ) —

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

End of period balance ( 3 ) ( 3 ) ( 3 ) ( 3 )

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Beginning of period balance ( 199 ) ( 205 ) ( 207 ) ( 211 )

Other comprehensive income, net of tax expense of ($ 1 ), ($ 1 ), ($ 4 ), and ($ 2 ), respectively

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

End of period balance ( 202 ) ( 203 ) ( 202 ) ( 203 )

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Beginning of period balance ( 402 ) ( 451 ) ( 399 ) ( 459 )

Other comprehensive income (loss), net of tax expense of ($ 1 ), ($ 1 ), ($ 9 ), and ($ 2 ), respectively

Other comprehensive income, net of tax expense of ($ 1 ), ($ 1 ), ($ 10 ), and ($ 3 ), respectively

End of period balance ( 398 ) ( 448 ) ( 398 ) ( 448 )

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Beginning of period balance 9 9 8 10

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

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

( 2 ) ( 1 ) ( 1 ) ( 2 )

End of period balance 7 8 7 8

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Beginning of period balance ( 22 ) ( 23 ) ( 24 ) ( 18 )

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

1 ( 5 ) 2 ( 5 )

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

End of period balance ( 23 ) ( 16 ) ( 23 ) ( 16 )

Total beginning of period accumulated other comprehensive loss ( 760 ) ( 1,387 ) ( 1,147 ) ( 1,313 )

Total other comprehensive income (loss), net of tax (expense) benefit of ($ 46 ), $ 7 , ($ 130 ), and $ 22 , respectively

Total other comprehensive income, net of tax expense of ($ 66 ), ($ 281 ), ($ 196 ), and ($ 259 ), respectively

219 898 608 824

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

Total other comprehensive income attributable to noncontrolling interests, net of tax expense of $ 0 , $ 0 , $ 0 , and $ 0 , respectively

( 2 ) — ( 4 ) —

1 unchanged sentence

Shareholders' Earnings per Share

The denominator for basic and diluted shareholders' earnings per share for the three and six months ended June 30, 2025 and 2024 is as follows:

The denominator for basic and diluted shareholders' earnings per share for the three and nine months ended September 30, 2025 and 2024 is as follows:

Three Months Ended

June 30 Six Months Ended

September 30 Nine Months Ended

2025 2024 2025 2024

5 unchanged sentences

223.7 233.1 225.6 233.6

During the three months ended June 30, 2025 and 2024, weighted-average shares related to certain stock options of 1.9 and 0.5 , respectively, were excluded from the denominator for diluted shareholders' earnings per share because the stock options were anti-dilutive.

During the six months ended June 30, 2025 and 2024, weighted-average shares related to certain stock options of 1.7 and 0.6 , respectively, were excluded from the denominator for diluted earnings per share because the stock options were anti-dilutive.

During the three months ended September 30, 2025 and 2024, weighted-average shares related to certain stock options of 2.2 and 0.5 , 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, 2025 and 2024, weighted-average shares related to certain stock options of 1.9 and 0.5 , respectively, were excluded from the denominator for diluted 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.

25 unchanged sentences

These affiliated revenues are eliminated in our consolidated financial statements.

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

For segment reporting, we present certain Carelon Services 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.

4 unchanged sentences

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 and six months ended June 30, 2025 and 2024 is as follows:

Financial data by reportable segment for the three and nine months ended September 30, 2025 and 2024 is as follows:

Benefits CarelonRx Carelon

1 unchanged sentence

& Other Eliminations Total

Three Months Ended June 30, 2025

Three Months Ended September 30, 2025

Premiums $ 40,304 $ — $ 1,762 $ 1,762 $ — $ ( 275 ) $ 41,791

11 unchanged sentences

Operating gain (loss) $ 601 $ 556 $ 219 $ 775 $ ( 81 ) $ — $ 1,295

Three Months Ended June 30, 2024

Three Months Ended September 30, 2024

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

14 unchanged sentences

& Other Eliminations Total

Six Months Ended June 30, 2025

Nine Months Ended September 30, 2025

Premiums $ 119,602 $ — $ 5,125 $ 5,125 $ — $ ( 778 ) $ 123,949

11 unchanged sentences

Operating gain (loss) $ 4,378 $ 1,694 $ 1,110 $ 2,804 $ ( 292 ) $ — $ 6,890

Six Months Ended June 30, 2024

Nine Months Ended September 30, 2024

Premiums $ 106,926 $ — $ 1,882 $ 1,882 $ — $ ( 887 ) $ 107,921

11 unchanged sentences

Operating gain (loss) $ 6,036 $ 1,639 $ 682 $ 2,321 $ ( 1,168 ) $ — $ 7,189

A reconciliation of reportable segments’ operating revenue to the amounts of total revenues included in our consolidated statements of income for the three and six months ended June 30, 2025 and 2024 is as follows:

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, 2025 and 2024 is as follows:

Three Months Ended

June 30 Six Months Ended

September 30 Nine Months Ended

2025 2024 2025 2024

2 unchanged sentences

Net losses on financial instruments ( 1 ) ( 125 ) ( 596 ) ( 371 )

Gain on sale of business

Gain (loss) on sale of business

— ( 39 ) — 201

Total revenues $ 50,711 $ 45,106 $ 149,378 $ 131,569

A reconciliation of reportable segments' operating gain to income before income tax expense included in our consolidated statements of income for the three and six months ended June 30, 2025 and 2024 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 and nine months ended September 30, 2025 and 2024 is as follows:

Three Months Ended

June 30 Six Months Ended

September 30 Nine Months Ended

2025 2024 2025 2024

2 unchanged sentences

Net losses on financial instruments 1 125 596 371

Gain on sale of business

Gain (loss) on sale of business

— 39 — ( 201 )

3 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