What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2026-02-19 compared with 2025-02-20 · 317 added, 304 removed, 1235 unchanged (33% of the section changed)

58 unchanged sentences

Income from operations 2,704 2,562 4,013

Gain on sale of Gentiva Hospice — — ( 237 )

Loss on sale of business 67 — —

Interest expense 631 660 493

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Net income 2,489 2,489 ( 5 ) 2,484

Distribution to noncontrolling interest holders, net ( 1 ) ( 1 )

Sale of Gentiva Hospice ( 11 ) ( 11 )

Distribution from noncontrolling interest holders, net 7 7

Acquisition ( 5 ) ( 5 )

Other comprehensive loss ( 1,346 ) ( 1,346 ) ( 1,346 )

Other comprehensive income 305 305 305

Common stock repurchases — — ( 1,586 ) ( 1,586 ) ( 1,586 )

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Distribution from noncontrolling interest holders, net — 7 7

Acquisition — ( 5 ) ( 5 )

Other comprehensive income 305 305 305

Other comprehensive loss ( 68 ) ( 68 ) ( 68 )

Common stock repurchases — — ( 803 ) ( 803 ) ( 803 )

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Restricted stock unit vesting 29 — ( 90 ) 90 — —

Stock option exercises — — 5 4 9 9

Balances, December 31, 2024 198,719 $ 33 $ 3,463 $ 28,317 $ ( 1,067 ) $ ( 14,371 ) $ 16,375 $ 70 $ 16,445

Net income 1,188 1,188 15 1,203

Distribution from noncontrolling interest holders, net — 7 7

Other comprehensive loss ( 68 ) ( 68 ) ( 68 )

Distribution to noncontrolling interest holders, net — ( 5 ) ( 5 )

Other comprehensive income 434 434 434

Common stock repurchases — — ( 151 ) ( 151 ) ( 151 )

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

Gain on sale of Gentiva Hospice — — ( 237 )

(Gain) loss on investment securities, net ( 24 ) 54 205

Loss on sale of business 67 — —

Loss (gain) on investment securities, net 50 ( 24 ) 54

Equity in net losses 102 94 63

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Cash flows from investing activities

Proceeds from sale of Gentiva Hospice, net — — 2,701

Proceeds from sale of business, net 115 — —

Acquisitions, net of cash and cash equivalents acquired ( 81 ) ( 89 ) ( 233 )

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Other — ( 50 ) —

Net cash used in investing activities ( 2,952 ) ( 3,492 ) ( 1,006 )

Net cash provided by (used in) investing activities 2,273 ( 2,952 ) ( 3,492 )

Cash flows from financing activities

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Net cash used in financing activities ( 1,215 ) ( 2,487 ) ( 856 )

(Decrease) increase in cash and cash equivalents ( 2,473 ) ( 367 ) 1,667

Increase (decrease) in cash and cash equivalents 1,979 ( 2,473 ) ( 367 )

Cash and cash equivalents at beginning of period 2,221 4,694 5,061

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Interest payments $ 628 $ 584 $ 394

Income tax payments, net $ 570 $ 997 $ 758

Details of businesses acquired in purchase transactions:

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Through our Humana insurance services, and our CenterWell health care services, we make it easier for the millions of people we serve to achieve their best health – delivering the care and service they need, when they need it.

These efforts are leading to a better quality of life for people with Medicare, Medicaid, families, individuals, military service personnel, and communities at large.

These efforts are leading to a better quality of life for Medicare and Medicaid participants, families, individuals, military service personnel, and communities at large.

References throughout these notes to consolidated financial statements to “we,” “us,” “our,” “Company,” and “Humana,” mean Humana Inc.

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Employer Group Commercial Medical Products Business Exit

In February 2023, we announced our planned exit from the Employer Group Commercial Medical Products business, which includes all fully insured, self-funded and Federal Employee Health Benefit medical plans, as well as associated wellness and rewards programs.

No other Humana health plan offerings are materially affected.

During 2025, we finalized our exit from the Employer Group Commercial Medical Products business, which included all fully insured, self-funded and Federal Employee Health Benefit medical plans, as well as associated wellness and rewards programs.

No other Humana health plan offerings were materially affected.

Following a strategic review, we determined the Employer Group Commercial Medical Products business was no longer positioned to sustainably meet the needs of commercial members over the long term or support our long-term strategic plans.

We anticipate the exit of this line of business to be finalized in the first half of 2025.

Value Creation Initiatives and Impairment Charges

In order to create capacity to fund growth and investment in our Medicare Advantage business and further expansion of our healthcare services capabilities beginning in 2022, we committed to drive additional value for the enterprise through cost saving, productivity initiatives, and value acceleration from previous investments.

As a result of these initiatives, we recorded charges of $ 281 million, $ 436 million and $ 473 million in 2024, 2023 and 2022, respectively, primarily within operating costs in the consolidated statements of income.

In order to create capacity to fund growth in our businesses, we committed to drive additional value for the enterprise through cost saving and productivity initiatives.

In addition, in response to sustained macroeconomic, regulatory and competitive pressures impacting the industry, we initiated a substantial multi-year transformation program designed to re-align our cost structure, operating model and technology footprint with evolving market conditions.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

The value creation initiative charges primarily relate to $ 256 million, $ 237 million and $ 248 million in asset impairments in 2024, 2023 and 2022, respectively, as well as $ 25 million, $ 199 million and $ 116 million in severance charges in connection with workforce optimization in 2024, 2023 and 2022, respectively.

The remainder of the 2022 charges primarily relate to external consulting fees.

In addition, we recorded impairment charges of $ 200 million, relating to indefinite-lived intangible assets, in 2024 and $ 91 million, including $ 55 million relating to indefinite-lived intangible assets, in 2023.

There was no material impairment charge recorded in 2022.

The indefinite-lived intangible asset impairment charges were included within operating costs in our consolidated statements of income with the remaining impairment charges included within investment income.

Further, we recorded severance charges of $ 70 million in 2023 within operating costs in our consolidated statement of income as a result of our exit from the Employer Group Commercial Medical Products business.

The emergence and spread of the novel coronavirus, or COVID-19, beginning in the first quarter of 2020 has impacted our business.

Initially during periods of increased incidences of COVID-19, a reduction in non-COVID-19 hospital admissions for non-emergent and elective medical care resulted in lower overall healthcare system utilization.

At the same time, COVID-19 treatment and testing costs increased utilization.

During 2022, we experienced lower overall utilization of the healthcare system than anticipated, as the reduction in COVID-19 utilization following the increased incidence associated with the Omicron variant outpaced the increase in non-COVID-19 utilization.

The COVID-19 National Emergency declared in 2020 was terminated on April 10, 2023 and the Public Health Emergency expired on May 11, 2023.

As a result of these initiatives, we recorded charges of $ 449 million, $ 281 million and $ 436 million in 2025, 2024 and 2023, respectively, primarily within operating costs in the consolidated statements of income.

We expect to incur additional charges over the course of the program.

The value creation initiative charges primarily relate to $ 329 million, $ 25 million and $ 199 million in severance and other employee related charges in connection with workforce optimization in 2025, 2024 and 2023, respectively, as well as $ 40 million, $ 256 million and $ 237 million in asset impairments in 2025, 2024 and 2023, respectively.

The remainder of the 2025 charges primarily relate to external consulting spend.

In addition, we recorded impairment charges of $ 253 million, $ 200 million and $ 91 million in 2025, 2024 and 2023, respectively.

The impairment charges included impairment of indefinite-lived intangible assets for $ 128 million, $ 200 million and $ 55 million in 2025, 2024 and 2023, respectively, included within operating costs in our consolidated statements of income.

The remaining impairment charges were included within investment income in our consolidated statements of income.

In addition to the value creation initiatives, we also recorded severance charges of $ 70 million in 2023 within operating costs in our consolidated statement of income as a result of our exit from the Employer Group Commercial Medical Products business.

Cash and Cash Equivalents

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For the purpose of determining gross gains and losses for equity securities, changes in fair value at the reporting date are included as a component of investment income in the consolidated statements of income.

Under the current expected credit losses model, or CECL, expected losses on available for sale debt securities are recognized through an allowance for credit losses rather than as reductions in the amortized cost of the securities.

Under the current expected credit losses model, or CECL, credit losses on available for sale debt securities are recognized through an allowance for credit losses rather than as reductions in the amortized cost of the securities.

For debt securities whose fair value is less than their amortized cost which we do not intend to sell or are not required to sell, we evaluate the expected cash flows to be received as compared to amortized cost and determine if an expected credit loss has occurred.

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To the extent we have the intent to sell the debt security or it is more likely than not we will be required to sell the debt security before recovery of our amortized cost basis, we recognize an impairment loss in income in an amount equal to the full difference between the amortized cost basis and the fair value.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Potential expected credit loss impairment is considered using a variety of factors, including the extent to which the fair value has been less than cost;

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failure of the issuer to make scheduled principal or interest payments on the debt security and changes in prepayment speeds.

For debt securities, we take into account expectations of relevant market and economic data.

For debt securities, we take into account expectations of relevant market and

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

economic data.

For example, with respect to mortgage and asset-backed securities, such data includes underlying loan level data and structural features such as seniority and other forms of credit enhancements.

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Receivables and Revenue Recognition

We established one-year commercial membership contracts with employer groups, subject to cancellation by the employer group on 30 -day written notice.

Our Medicare contracts with CMS renew annually.

We generally establish one -year specialty membership contracts, subject to cancellation on a 30 -day written notice.

Our military services contracts with the federal government and certain contracts with various state Medicaid programs generally are multi-year contracts subject to annual renewal provisions.

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We receive monthly premiums from the federal government and various states according to government specified payment rates and various contractual terms.

We bill and collect premium from employer groups and members in our Medicare and other individual products monthly.

Changes in premium revenues resulting from the periodic changes in risk-adjustment scores derived from medical diagnoses for our membership are estimated by projecting the ultimate annual premium and are recognized ratably during the year, with adjustments each period to reflect changes in the ultimate premium.

We bill and collect member premiums on a monthly basis.

Changes in Medicare premium revenues resulting from the periodic changes in risk-adjustment scores derived from medical diagnoses for our membership are estimated by projecting the ultimate annual premium and recognized ratably during the year with adjustments each period to reflect changes in the ultimate premium.

Receivables or payables are classified as current or long-term in our consolidated balance sheet based on the timing of the expected settlement.

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Premiums revenue is recognized as income in the period members are entitled to receive services, and is net of estimated uncollectible amounts, retroactive membership adjustments, and adjustments to recognize rebates under the minimum benefit ratios required under the Patient Protection and Affordable Care Act and The Health Care and Education Reconciliation Act of 2010, which we collectively refer to as the Health Care Reform Law.

We estimate policyholder rebates by projecting calendar year minimum benefit ratios for the small group and large group markets, as defined by the Health Care Reform Law using a methodology prescribed by Health and Human Services, or HHS, separately by state and legal entity.

Medicare Advantage and Medicaid products are also subject to minimum benefit ratio requirements.

Estimated calendar year rebates recognized ratably during the year

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

are revised each period to reflect current experience.

Retroactive membership adjustments result from enrollment changes not yet processed, or not yet reported by an employer group or the government.

Medicare Advantage and Medicaid products are subject to minimum benefit ratio requirements.

Estimated calendar year rebates recognized ratably during the year are revised each period to reflect current experience.

Retroactive membership adjustments result from enrollment changes not yet processed, or not yet reported by the federal government and various states.

We routinely monitor the collectability of specific accounts, the aging of receivables, historical retroactivity trends, estimated rebates, as well as prevailing and anticipated economic conditions, and reflect any required adjustments in current operations.

Premiums received prior to the service period are recorded as unearned revenues.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Medicare Part D

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Our CMS payment is subject to risk sharing through the Medicare Part D risk corridor provisions.

Receipts for reinsurance and low-income cost subsidies and discounts on certain prescription drugs in the coverage gap represent payments for prescription drug costs for which we are not at risk.

Receipts for reinsurance, low-income cost subsidies, and manufacturer discounts on certain prescription drugs represent payments for prescription drug costs for which we are not at risk.

The risk corridor provisions compare costs targeted in our bids to actual prescription drug costs, limited to actual costs that would have been incurred under the standard coverage as defined by CMS.

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A reconciliation and related settlement of CMS’s prospective subsidies against actual prescription drug costs we paid is made after the end of the year.

The Health Care Reform Law mandates consumer discounts of 75 % on brand name and generic prescription drugs for Part D plan participants in the coverage gap.

These discounts are funded by CMS and pharmaceutical manufacturers while we administer the application of these funds.

The Health Care Reform Law mandated consumer discounts of 75% on brand name and generic prescription drugs for Part D plan participants in the coverage gap prior to January 1, 2025.

These discounts were funded by CMS and pharmaceutical manufacturers while we administered the application of these funds.

Effective January 1, 2025, the Medicare Part D coverage gap was eliminated as mandated by the Inflation Reduction Act of 2022.

The standard Part D benefit now comprises three phases:

the deductible phase, the initial coverage phase and the catastrophic coverage phase.

Beneficiaries' out-of-pocket expenses for covered prescription drugs are capped at $2,000, after which they incur no additional cost sharing for the remainder of the year.

In addition, the Coverage Gap Discount Program was replaced by the Manufacturer Discount Program, requiring pharmaceutical manufacturers to provide discounts on brand name drugs during both the initial coverage and catastrophic phases.

We account for the funding of subsidies and discounts for which we assume no risk as a deposit in our consolidated balance sheets and as a financing activity under receipts (payments) from contract deposits, net in our consolidated statements of cash flows.

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Settlement of the reinsurance and low-income cost subsidies as well as the risk corridor payment is based on a reconciliation made approximately 9 months after the close of each calendar year.

Settlement with CMS for brand name prescription drug discounts is based on a reconciliation made approximately 14 to 18 months after the close of each calendar year.

We continue to revise our estimates with respect to the risk corridor provisions based on

Settlement with CMS for brand name prescription drug discounts is based on a reconciliation made approximately 14 to 18 months after the close of

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

subsequent period pharmacy claims data.

For additional information regarding amounts recorded to our consolidated balance sheets related to the risk corridor settlement and subsidies from CMS with respect to the Medicare Part D program, refer to Note 7 to the audited Consolidated Financial Statements included in Part II, Item 8, "Financial Statements and Supplementary Data" in this Form 10-K.

each calendar year.

We continue to revise our estimates with respect to the risk corridor provisions based on subsequent period pharmacy claims data.

Patient services revenue

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Services revenues related to product revenues from dispensing prescriptions are recorded when the prescription or product is shipped.

Our primary care recognizes revenues for certain value-based arrangements.

Our primary care business recognizes revenues for certain value-based arrangements.

Under these value-based arrangements, we enter into agreements with health plans to stand ready to deliver, integrate, direct and control the administration and management of certain health care services for our patients.

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Fee-for-service revenue is recognized at agreed upon rates, net of contractual allowances, as the performance obligation is completed on the date of service.

For our home solutions businesses, revenues include net patient services revenue recorded based upon established billing rates, net of contractual allowances, discounts, or other implicit price concessions, and are recognized as performance obligations are satisfied, which is in the period services are rendered.

For our home solutions business, revenues include net patient services revenue recorded based upon established billing rates, net of contractual allowances, discounts, or other implicit price concessions, and are recognized as performance obligations are satisfied, which is in the period services are rendered.

For the year ended December 31, 2025, revenue recognized from performance obligations related to prior periods (for example, due to changes in transaction price), was not material.

Further, revenue expected to be recognized in any future year related to remaining performance obligations is not material.

Administrative services fees

Administrative services fees cover the processing of claims, offering access to our provider networks and clinical programs, and responding to customer service inquiries from members of self-funded groups.

Revenues from providing administration services, also known as administrative services only, or ASO, are recognized in the period services are performed and are net of estimated uncollectible amounts.

ASO fees are estimated by multiplying the membership covered under the various contracts by the contractual rates.

Under ASO contracts, self-funded employers retain the risk of financing substantially all of the cost of health benefits.

However, many ASO customers purchase stop loss insurance coverage from us to cover catastrophic claims or to limit aggregate annual costs.

Accordingly, we have recorded premiums revenue and benefits expense related to these stop loss insurance contracts.

Other services revenue

Services revenue includes the processing of claims, offering access to our provider networks and clinical programs, and responding to customer service inquiries from members of self-funded groups.

Services revenue is recognized in the period services are performed and are net of estimated uncollectible amounts.

We routinely monitor the collectability of specific accounts, the aging of receivables, as well as prevailing and anticipated economic conditions, and reflect any required adjustments in current operations.

ASO fees received prior to the service period are recorded as unearned revenues.

Services revenue received prior to the service period is recorded as unearned revenue.

Under our TRICARE contracts with the Department of Defense (DoD) we provide administrative services, including offering access to our provider networks and clinical programs, claim processing, customer service, enrollment, and other services, while the federal government retains all of the risk of the cost of health benefits.

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Administrative services fees are recognized as services are performed.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Our TRICARE members are served by both in-network and out-of-network providers in accordance with our contracts.

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We account for the payments of the federal government’s claims and the related reimbursements under deposit accounting in our consolidated balance sheets and as a financing activity under receipts (payments) from contract deposits, net in our consolidated statements of cash flows.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

2025 2024 2023

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$ ( 74 ) $ ( 92 ) $ 57

Receivables, including premium receivables, patient services revenue receivables, and ASO fee receivables, are shown net of allowances for estimated uncollectible accounts, retroactive membership adjustments, and contractual allowances.

Receivables, including premium receivables, patient services revenue receivables, and other services revenue receivables, are shown net of allowances for estimated uncollectible accounts, retroactive membership adjustments, and contractual allowances.

At December 31, 2025 and 2024, accounts receivable related to services were $ 367 million and $ 360 million, respectively.

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Although the sale is made without recourse, we provide collection services related to the transferred assets without compensation.

The Facility's total capacity is $ 1.19 billion with an initial one year term, unless terminated early or extended.

The Facility's initial total capacity was $ 1.19 billion with a one year term, unless terminated early or extended.

In October 2025, we extended the Facility for an additional one year term and updated its capacity to $ 1.09 billion.

As control of, and risk related to, the receivables are transferred to the financial institution, the transactions under the Facility are accounted for as a true sale.

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Cash proceeds from the sale of receivables to the financial institution are classified as an operating activity included in “Changes in other assets” and rebates collected from manufacturers not yet remitted to the financial institution are classified as a financing activity included in “Changes in rebate factor payable” on our accompanying consolidated statement of cash flows.

For the year ended December 31, 2024, we sold $ 639 million of pharmaceutical rebate receivables under the Facility and the loss on discounted receivables were not material.

As of December 31, 2024, we collected $ 168 million from manufacturers, $ 123 million of which have not been remitted to the financial institution.

For the year ended December 31, 2025, we sold $ 1.5 billion of pharmaceutical rebate receivables under the Facility and the loss on discounted receivables was not material.

During 2025, we collected $ 1.0 billion, of the $ 1.5 billion sold, from manufacturers and remitted back to the financial institution.

For the year ended December 31, 2024, we sold $ 639 million of pharmaceutical rebate receivables under the Facility and the loss on discounted receivables was not material.

As of December 31, 2024, we collected $ 168 million from manufacturers, $ 123 million of which had not been remitted to the financial institution.

During 2025, the $ 123 million was remitted back to the financial institution and the remaining $ 471 million receivables sold were collected from the manufacturers and remitted back to the financial institution.

Policy Acquisition Costs

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

employer-group prepaid health services policies as incurred.

These short-duration employer-group prepaid health services policies typically have a 1 -year term and may be canceled upon 30 days notice by the employer group.

Medicare Advantage prepaid health services policies as incurred.

These short-duration Medicare Advantage prepaid health services policies typically have a 1 -year term and may be canceled upon 30 days notice.

Long-Lived Assets

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An impairment that is other-than-temporary is recognized in the period identified.

For additional information regarding our equity method investments, refer to Note 4 to the audited Consolidated Financial Statements included in Part II, Item 8, "Financial Statements and Supplementary Data" in this Form 10-K.

For additional information regarding our equity method investments, refer to Note 4.

Goodwill and Intangible Assets

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The fair value of our reporting units with significant goodwill exceeded carrying amounts.

However, unfavorable changes in key assumptions or combinations of assumptions including a significant increase in the discount rate, decrease in the long-term growth rate or substantial reduction in our underlying cash flow assumptions, including revenue growth rates, operating cost trends, and projected operating income could have a significant negative impact on the estimated fair value of our home solutions reporting unit, which accounted for $ 4.4 billion of goodwill.

However, unfavorable changes in key assumptions or combinations of assumptions including a significant increase in the discount rate, decrease in the long-term growth rate or substantial reduction in our underlying cash flow assumptions, including revenue expectations and growth rates, operating cost trends, and projected operating income could have a significant negative impact on the estimated fair value of our home solutions reporting unit, which accounted for $ 4.4 billion of goodwill.

Impairment tests completed for 2025, 2024, and 2023 did no t result in an impairment loss.

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For our CON intangible assets, unfavorable changes in key assumptions or combinations of assumptions, including a significant increase in the discount rate, decrease in the long-term growth rate or substantial reduction in the underlying cash flow assumptions, including revenue growth rates, operating cost trends, and projected operating income could have a significant negative impact on the estimated fair value of our CON intangible assets, which account for $ 790 million of our intangible assets.

Impairment tests completed for 2024 and 2023 resulted in impairment charges of $ 200 million and $ 55 million, respectively.

Impairment test completed for 2022 did not result in a material impairment charge.

Impairment tests completed on our indefinite-lived intangible assets for 2025, 2024 and 2023 resulted in impairment charges of $ 128 million, $ 200 million and $ 55 million, respectively.

These charges reflect the amount by which the carrying value exceeded its estimated fair value.

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Benefits expense is recognized in the period in which services are provided and includes an estimate of the cost of services which have been incurred but not yet reported, or IBNR.

Our reserving practice is to consistently

Our reserving practice is to consistently recognize the actuarial best point estimate within a level of confidence required by actuarial standards.

Actuarial standards of practice generally require a level of confidence such that the liabilities established for IBNR have a

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

recognize the actuarial best point estimate within a level of confidence required by actuarial standards.

Actuarial standards of practice generally require a level of confidence such that the liabilities established for IBNR have a greater probability of being adequate versus being insufficient, or such that the liabilities established for IBNR are sufficient to cover obligations under an assumption of moderately adverse conditions.

Adverse conditions are situations in which the actual claims are expected to be higher than the otherwise estimated value of such claims at the time of the estimate.

greater probability of being adequate versus being insufficient.

Therefore, in many situations, the claim amounts ultimately settled will be less than the estimate that satisfies the actuarial standards of practice.

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We reassess the profitability of our contracts for providing insurance coverage to our members when current operating results or forecasts indicate probable future losses.

We establish a premium deficiency reserve in current

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

operations to the extent that the sum of expected future costs, claim adjustment expenses, and maintenance costs exceeds related future premiums under contracts.

We establish a premium deficiency reserve in current operations to the extent that the sum of expected future costs, claim adjustment expenses, and maintenance costs exceeds related future premiums under contracts.

For purposes of determining premium deficiencies, contracts are grouped in a manner consistent with our method of acquiring, servicing, and measuring the profitability of such contracts.

Losses recognized as a premium deficiency result in a beneficial effect in subsequent periods as operating losses under these contracts are charged to the liability previously established.

Because the majority of our member contracts renew annually, we would not record a material premium deficiency reserve, except when unanticipated adverse events or changes in circumstances indicate otherwise.

Because the majority of our member

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

contracts renew annually, we would not record a material premium deficiency reserve, except when unanticipated adverse events or changes in circumstances indicate otherwise.

We believe our benefits payable are adequate to cover future claims payments required.

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Most of these policies are subject to reinsurance.

For additional information regarding reinsurance, refer to Note 19 to the audited Consolidated Financial Statements included in Part II, Item 8, "Financial Statements and Supplementary Data" in this Form 10-K.

For additional information regarding reinsurance, refer to Note 19.

Book Overdraft

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Noncontrolling interests, which relate to the minority ownership held by third-party investors in certain of our businesses within our Insurance and CenterWell segments, are reported below net income under the heading “Net (income) loss attributable to noncontrolling interests” in the consolidated statements of income and presented as a component of equity in the consolidated balance sheets.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Stock-Based Compensation

We generally recognize stock-based compensation expense, as determined on the date of grant at fair value, on a straight-line basis over the period during which an employee is required to provide service in exchange for the award (the vesting period).

In addition, for awards with both time and performance-based conditions, we generally recognize compensation expense on a straight line basis over the vesting period when it is probable that the performance condition will be achieved.

In addition, for awards with both time and performance-based conditions, we generally recognize compensation expense on a straight line basis over the vesting period when it is probable that the

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

performance condition will be achieved.

We estimate expected forfeitures and recognize compensation expense only for those awards which are expected to vest.

We estimate the grant-date fair value of stock options using the Black-Scholes option-pricing model.

For additional information regarding our stock-based compensation plans, refer to Note 14 to the audited Consolidated Financial Statements included in Part II, Item 8, "Financial Statements and Supplementary Data" in this Form 10-K.

For additional information regarding our stock-based compensation plans, refer to Note 14.

Earnings Per Common Share

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Diluted earnings per common share is computed on the basis of the weighted-average number of unrestricted common shares outstanding plus the dilutive effect of outstanding employee stock options and restricted shares, or units, using the treasury stock method.

For additional information regarding our earnings per share, refer to Note 15 to the audited Consolidated Financial Statements included in Part II, Item 8, "Financial Statements and Supplementary Data" in this Form 10-K.

For additional information regarding our earnings per share, refer to Note 15.

Assets and liabilities measured at fair value are categorized into a fair value hierarchy based on whether the inputs to valuation techniques are observable or unobservable.

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Fair value of privately held investment grade debt securities are estimated using a variety of valuation methodologies, including both market and income approaches, where an observable quoted market does not exist and are generally classified as Level 3.

For privately-held investment grade debt securities,

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

such methodologies include reviewing the value ascribed to the most recent financing, comparing the security with securities of publicly-traded companies in similar lines of business with similar credit characteristics, and reviewing the underlying financial performance including estimating discounted cash flows.

For privately-held investment grade debt securities, such methodologies include reviewing the value ascribed to the most recent financing, comparing the security with securities of publicly-traded companies in similar lines of business with similar credit characteristics, and reviewing the underlying financial performance including estimating discounted cash flows.

We obtain at least one price for each security from a third-party pricing service.

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When quoted prices are not available, the third-party pricing service may use quoted market prices of comparable securities or discounted cash flow analysis, incorporating inputs that are currently observable in the markets for similar securities.

Inputs that are often used in the valuation methodologies include benchmark yields, reported trades, credit spreads, broker quotes, default rates, and prepayment speeds.

Inputs that are often used in the valuation methodologies include benchmark yields, reported trades, credit spreads, broker quotes, default rates, and

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

prepayment speeds.

We are responsible for the determination of fair value and as such we perform analysis on the prices received from the third-party pricing service to determine whether the prices are reasonable estimates of fair value.

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

2023-07, Segment Reporting — Improvements to Reportable Segment Disclosures.

The new guidance requires incremental disclosures related to a public entity’s reportable segments but does not change the definition of a segment, the method for determining segments, or the criteria for aggregating operating segments into reportable segments.

The new guidance became effective for us beginning with our annual 2024 year-end financial statements.

The adoption of ASU 2023-07 in 2024 did not have a material impact on our consolidated financial statements.

Our segment footnote disclosure was updated to reflect adoption of the standard.

Accounting Pronouncements Effective in Future Periods

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

2023-09 — Income Taxes (Topic 740):

Improvements to Income Tax Disclosures.

The new guidance requires significant additional disclosures about income taxes, primarily focused on the disclosure of income taxes paid and the rate reconciliation table.

The new guidance requires prospective application (with retrospective application permitted).

The new guidance will be effective for us beginning with our annual 2025 year-end financial statements, with early adoption permitted.

We are currently evaluating the impact on our income tax footnote disclosures.

Improvements to Income Tax Disclosures, effective for annual 2025 year-end financial statements.

The updated guidance requires additional disclosure and disaggregated information in the income tax rate reconciliation along with qualitative explanation of individually significant reconciling items.

The updated guidance also requires disclosure of the income taxes paid (net of refunds received) disaggregated by jurisdiction.

Our income tax footnote was updated to reflect the adoption of the standard, which did not have a material impact on our disclosures.

Accounting Pronouncements Effective in Future Periods

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

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The new guidance will be effective for us beginning with our annual 2027 year-end financial statements, with early adoption permitted.

We are currently evaluating the impact on our results of operations, financial position and cash flows.

We are currently evaluating the impact on our 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.

The new guidance modernizes consideration of different methods of software development, updating the requirements for capitalization of software costs.

The new guidance requires prospective application (with retrospective application permitted).

The new guidance will be effective for us beginning with our interim 2028 financial statements, with early adoption permitted.

We are currently evaluating the impact on our consolidated results of operations, financial position, and cash flows.

There are no other recently issued accounting standards that apply to us or that are expected to have a material impact on our results of operations, financial condition, or cash flows.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

ACQUISITIONS AND DIVESTITURES

On August 11, 2022, we completed the sale of a 60 % i nterest in Gentiva (formerly Kindred) Hospice to Clayton, Dubilier & Rice, or CD&R, for cash proceeds of approximately $ 2.7 billion, net of cash disposed, including debt repayments from Gentiva Hospice to Humana of $ 1.9 billion.

In connection with the sale, we recognized a pre-tax gain, net of transaction costs, of $ 237 million which was reported as a gain on sale of Gentiva Hospice in the accompanying consolidated statement of income for the year ended December 31, 2022.

Prior to the sale, Gentiva Hospice revenues and pretax earnings through the date of sale for the year ended December 31, 2022, were $ 958 million and $ 150 million, respectively.

During 2024, 2023, and 2022, we acquired various health and wellness related businesses which, individually or in the aggregate, have not had a material impact on our results of operations, financial condition, or cash flows.

During 2025, 2024, and 2023, we acquired various health and wellness related businesses, and divested of a business during 2025, that individually or in the aggregate, have not had a material impact on our results of operations, financial condition, or cash flows.

The results of operations and financial condition of these businesses acquired have been included in our consolidated statements of income and consolidated balance sheets from the respective acquisition dates.

Acquisition-related costs recognized in each of 2024, 2023 and 2022 were not material to our results of operations.

Acquisition and divestiture related costs recognized in 2025, 2024 and 2023 were not material to our results of operations.

For asset acquisitions, the goodwill acquired is partially amortizable as deductible expenses for tax purposes.

The pro forma financial information assuming the acquisitions had occurred as of the beginning of the calendar year prior to the year of acquisition, as well as the revenues and earnings generated during the year of acquisition, were not material for disclosure purposes.

On February 13, 2026, we completed the acquisition of a primary care business for consideration of approximately $ 941 million.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

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At December 31, 2025 and 2024, we owned approximately 35 %.

This investment was reflected in equity method investments in our December 31, 2024 and 2023 consolidated balance sheets, with our share of loss reported as equity in net losses in our consolidated statements of income.

The summarized balance sheets and statements of income at December 31, 2024 and 2023 of Gentiva Hospice were as follows:

This investment was reflected in equity method investments in our December 31, 2025 and 2024 consolidated balance sheets, with our share of loss reported as equity in net losses in our consolidated statements of income for the years ended December 31, 2025, 2024, and 2023.

The summarized balance sheets at December 31, 2025 and 2024 and statements of income for the years ended December 31, 2025, 2024, and 2023 of Gentiva Hospice were as follows:

Balance sheets December 31, 2025 December 31, 2024

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Statements of income

For the year ended December 31, 2024 For the year ended December 31, 2023

For the year ended December 31, 2025 For the year ended December 31, 2024 For the year ended December 31, 2023

(in millions)

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Net loss ( 84 ) ( 92 ) ( 23 )

In 2020, our Primary Care Organization entered into a strategic partnership with Welsh, Carson, Anderson & Stowe, or WCAS, to accelerate the expansion of our primary care model.

In May 2022, we established a second strategic partnership with WCAS to develop additional centers between 2023 and 2025.

As of December 31, 2024, there were 133 primary care clinics operating under the partnership and we have capacity to open or acquire up to approximately 20 additional centers through the existing partnership agreements.

Our primary care business previously entered into a strategic partnership with Welsh, Carson, Anderson & Stowe, or WCAS, to accelerate the expansion of our primary care model through the development of clinics.

As of December 31, 2025, there were 146 primary care clinics operating under the partnership.

In addition, the agreements include a series of put and call options through which WCAS may require us to purchase their interest in the entity, and through which we may acquire WCAS’s interest, over the next 1 to 9 years.

We have the option to purchase the first cohort of clinics in 2025 for approximately $ 600 million to $ 700 million based on current projections.

All existing cohorts can be called by us from 2025 to 2032 and could require $ 2.5 billion to $ 3.5 billion based on current projections.

We have the option to purchase the first two cohorts of clinics in 2026 for approximately $ 1.0 billion to $ 1.5 billion based on current projections.

All existing cohorts can be called by us from 2026 to 2033 or put to us by WCAS from 2027 to 2034 and could require $ 3.0 billion to $ 5.0 billion to purchase based on current projections.

These estimates are dependent on multiple factors including the actual timing of when the put or call options are exercised, expected revenue growth at each center within the respective cohort and future capital contributions, among other factors.

For additional information on inputs relevant to these put and call options, refer to Note 6 to the audited Consolidated Financial Statements included in Part II, Item 8, "Financial Statements and Supplementary Data" of this Form 10-K.

For additional information on inputs relevant to these put and call options, refer to Note 6.

Other equity method investments

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Collateral with a fair value of $ 638 million was held at December 31, 2025.

At December 31, 2024, collateral from lending our investment securities has been reinvested in short-term, highly liquid assets.

At December 31, 2025, collateral from lending our investment securities was reinvested in short-term, highly liquid assets.

In addition, we participated in non-cash securities lending with a fair value of $ 193 million at December 31, 2025.

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Approximately 97 % of our debt securities were investment-grade quality, with a weighted average credit rating of AA- by Standard & Poor's Rating Service, or S&P at December 31, 2025.

Our remaining debt securities below investment grade were primarily rated B+, the higher end of the below investment-grade rating scale.

Our remaining debt securities below investment grade were primarily rated B.

Tax-exempt municipal securities were diversified among general

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

municipal securities were diversified among general obligation bonds of states and local municipalities in the United States as well as special revenue bonds issued by municipalities to finance specific public works projects such as utilities, water and sewer, transportation, or education.

obligation bonds of states and local municipalities in the United States as well as special revenue bonds issued by municipalities to finance specific public works projects such as utilities, water and sewer, transportation, or education.

Our general obligation bonds are diversified across the United States with no individual state exceeding approximately 1 % of our total debt securities.

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All issuers of debt securities we own that were trading at an unrealized loss at December 31, 2025 remain current on all contractual payments.

After taking into account these and other factors previously described, we believe these unrealized losses primarily were caused by an increase in market interest rates in the current markets since the time the debt securities were purchased.

At December 31, 2025, we did not intend to sell any debt securities with an unrealized loss position in accumulated other comprehensive income, and it is not likely that we will be required to sell these debt securities before recovery of their amortized cost basis.

Additionally, we did not record any material credit allowances for debt securities that were in an unrealized loss position at December 31, 2025, 2024 or 2023.

The detail of realized gains (losses) related to investment securities and included within investment income was as follows for the years ended December 31, 2024, 2023, and 2022:

The detail of (losses) gains related to investment securities and included within investment income was as follows for the years ended December 31, 2025, 2024, and 2023:

2025 2024 2023

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Gross losses on equity securities — — —

Net recognized gains (losses) on investment securities $ 24 $ ( 54 ) $ ( 205 )

The gains and losses related to equity securities for the years ended December 31, 2024, 2023 and 2022 was as follows:

2024 2023 2022

(in millions)

Net gains (losses) recognized on equity securities during the period $ — $ 1 $ ( 123 )

Net gains (losses) recognized on equity securities sold during the period — 1 ( 105 )

Unrealized losses recognized on equity securities still held at the end of the period $ — $ — $ ( 18 )

Net recognized (losses) gains on investment securities $ ( 50 ) $ 24 $ ( 54 )

Gains and losses recognized related to equity securities for the years ended December 31, 2025, 2024, and 2023 were not material.

The contractual maturities of debt securities available for sale at December 31, 2025, regardless of their balance sheet classification, are shown below.

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Total debt securities 18,635 — 18,313 322

Securities lending invested collateral 418 418 — —

Total invested assets $ 21,101 $ 2,466 $ 18,313 $ 322

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Our Level 3 assets had fair values of $ 322 million, or 1.5 % of total invested assets, and $ 218 million, or 1.0 % of total invested assets, at December 31, 2024 and 2023, respectively.

Our Level 3 assets had a fair value of $ 440 million, or 2.1 % of total invested assets, and $ 322 million, or 1.5 % of total invested assets, at December 31, 2025 and 2024, respectively.

During the years ended December 31, 2025 and 2024, the changes in the fair value of the assets measured using significant unobservable inputs (Level 3) were comprised of the following:

For the year ended December 31, 2024 For the year ended December 31, 2023

(in millions)

Mortgage-backed securities:

Commercial Asset-backed securities Corporate debt securities Total Mortgage-backed securities:

Commercial Asset-backed securities Corporate debt securities Total

(in millions) (in millions)

Beginning balance at January 1 $ 7 $ 73 $ 242 $ 322 $ 4 $ 38 $ 176 $ 218

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We utilize market-based financing rates, forward yield curves and discount rates in determining fair value of these swaps at each reporting date, a Level 2 measure within the fair value hierarchy.

The cumulative, aggregate increase to the carrying value of the senior notes was approximately $ 6 million at December 31, 2025.

Our swap positions at December 31, 2025 included swap assets of $ 57 million included within other long-term assets on our consolidated balance sheet, and swap liabilities of $ 51 million included within other long-term liabilities on our consolidated balance sheet.

The cumulative, aggregate adjustment to the carrying value of the senior notes was a decrease of approximately $ 129 million at December 31, 2024.

The swap liability, included within other long-term liabilities on our consolidated balance sheet, was approximately $ 129 million at December 31, 2024.

The swap asset, included within other long-term assets on our consolidated balance sheet, was approximately $ 68 million at December 31, 2023.

We include the gain or loss on the swap agreements in interest expense on our consolidated statement of income, the same line item as the offsetting loss or gain on the related senior notes.

The gain or loss due to hedge ineffectiveness was not material for the year ended December 31, 2024.

Our swap positions at December 31, 2024 included swap liabilities of $ 129 million, included within other long-term liabilities on our consolidated balance sheet.

We include the gain or loss on the swap agreements in interest expense on our consolidated income statement, the same line item as the offsetting loss or gain on the related senior notes.

The gain or loss due to hedge ineffectiveness was not material for the years ended December 31, 2025 and December 31, 2024.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

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(in millions)

$ 750 million, 5.875 % due March 1, 2033

$ 1,500 million, 5.375 % due April, 15, 2031

$ 750 million, 5.875 % due March 1, 2033

$ 500 million, 3.950 % due August 15, 2049

$ 850 million, 5.950 % due March 15, 2034

$ 750 million, 5.550 % due May 1, 2035

$ 400 million, 4.625 % due December 1, 2042

$ 750 million, 4.950 % due October 1, 2044

$ 1,250 million, 5.375 % due April, 15, 2031

$ 400 million, 4.800 % due March 15, 2047

$ 500 million, 3.950 % due August 15, 2049

$ 750 million, 5.500 % due March 15, 2053

$ 1,000 million, 5.750 % due April 15, 2054

$ 500 million, 6.000 % due May 1, 2055

Total Senior Notes Under Swap Agreements $ 6,500 $ 5,000

Financial Liabilities

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Carrying value approximates fair value for our term loans and commercial paper borrowings.

We had no outstanding commercial paper borrowings at December 31, 2024.

The commercial paper borrowings were $ 0.9 billion at December 31, 2023.

We had no outstanding commercial paper borrowings at December 31, 2025 and December 31, 2024.

Put and Call Options Measured at Fair Value

The put and call options fair values associated with our Primary Care Organization strategic partnership with Welsh, Carson, Anderson & Stowe, or WCAS, which are exercisable at a fixed revenue exit multiple and provide a minimum return on WCAS' investment if exercised, are measured at fair value each reporting period using a Monte Carlo simulation.

The put and call options fair values associated with our primary care strategic partnership with Welsh, Carson, Anderson & Stowe, or WCAS, which are exercisable at a fixed revenue exit multiple and provide a minimum return on WCAS' investment if exercised, are measured at fair value each reporting period using a Monte Carlo simulation.

The put and call options fair values, derived from the Monte Carlo simulation, were $ 1,400 million and $ 13 million, respectively, at December 31, 2025.

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The put liability and call asset are included within other long-term liabilities and other long-term assets, respectively, within our consolidated balance sheets.

Fair value changes to the put and call options are included within Other expense, net within our consolidated income statement.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

The significant unobservable inputs utilized in these Level 3 fair value measurements (and selected values) include the enterprise value, annualized volatility and credit spread.

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Long term growth rate 3.0 % 3.0 %

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

The assumptions used for annualized volatility, credit spread and weighted average cost of capital reflect the lowest and highest values where they differ significantly across the series of put and call options due to their expected exercise dates.

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Certain assets and liabilities are measured at fair value on a non-recurring basis subject to fair value adjustment only in certain circumstances.

As disclosed in Note 3, we completed the sale of a 60 % interest in Gentiva Hospice on August 11, 2022.

The carrying value of the assets and liabilities of Gentiva Hospice disposed approximates fair value.

The amount of goodwill included in the carrying value is based on the relative fair value of Gentiva Hospice as compared to the total fair value of our home solutions reporting unit included within the CenterWell segment.

Additionally, as disclosed in Note 3, we completed our acquisitions of certain health and wellness related businesses during 2024, 2023, and 2022.

The values of net tangible assets acquired and the resulting goodwill and other intangible assets were recorded at fair value using Level 3 inputs.

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

As disclosed in Note 3, we acquired various health and wellness related businesses during 2025, 2024, and 2023.

The values of net tangible assets acquired and the resulting goodwill and other intangible assets were recorded at fair value primarily using Level 3 inputs.

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

The fair values of goodwill and other intangible assets acquired in these acquisitions were internally estimated primarily based on the income approach.

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

We developed internal estimates for the expected cash flows and discount rates in the present value calculations.

Other than assets acquired and liabilities assumed in these acquisitions, there were no material assets or liabilities measured at fair value on a nonrecurring basis during 2024, 2023, or 2022.

We developed internal estimates for expected cash flows and discount rates in the present value calculations.

There were no material asset or liabilities measured at fair value on a nonrecurring basis during 2025, 2024, or 2023 other than the assets and liabilities assumed in these acquisitions and any subsequent impairments.

We recorded impairment charges of $ 128 million and $ 200 million relating to indefinite-lived intangible assets in 2025 and 2024, respectively.

MEDICARE PART D

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The accompanying consolidated balance sheets include the following amounts associated with Medicare Part D as of December 31, 2025 and 2024.

CMS subsidies/discounts in the table below include the reinsurance and low-income cost subsidies funded by CMS for which we assume no risk as well as brand name prescription drug discounts for Part D plan participants in the coverage gap funded by CMS and pharmaceutical manufacturers.

For additional information regarding our prescription drug benefits coverage in accordance with Medicare Part D, refer to Note 2 to the audited Consolidated Financial Statements included in Part II, Item 8, "Financial Statements and Supplementary Data" of this Form 10-K.

Settlement CMS

Discounts Risk

Settlement CMS

(in millions)

Other current assets $ 190 $ 1,203 $ 224 $ 514

Trade accounts payable and accrued expenses ( 83 ) ( 673 ) ( 232 ) ( 1,825 )

Net current asset (liability) 107 530 ( 8 ) ( 1,311 )

Other long-term assets 58 — 17 —

Other long-term liabilities ( 39 ) — ( 77 ) —

Net long-term asset (liability) 19 — ( 60 ) —

Total net asset (liability) $ 126 $ 530 $ ( 68 ) $ ( 1,311 )

CMS subsidies/discounts include the reinsurance and low-income cost subsidies funded by CMS for which we assume no risk as well as brand name prescription drug discounts for Part D plan participants funded by CMS and pharmaceutical manufacturers.

Effective January 1, 2025, the Medicare Part D coverage gap was eliminated as mandated by the Inflation Reduction Act of 2022.

The standard Part D benefit now comprises three phases:

the deductible phase, the initial coverage phase and the catastrophic coverage phase.

Beneficiaries' out-of-pocket expenses for covered prescription drugs are capped at $2,000, after which they incur no additional cost sharing for the remainder of the year.

These changes are anticipated to reduce out-of-pocket costs for beneficiaries and impact plan liabilities accordingly.

The accompanying consolidated balance sheets include $ 1.5 billion of net assets and $ 530 million of net assets associated with subsidy programs at December 31, 2025 and December 31, 2024, respectively.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

The accompanying consolidated balance sheets also include $ 1.6 billion of net assets and $ 126 million of net assets associated with cost sharing programs at December 31, 2025 and December 31, 2024, respectively.

For additional information regarding our prescription drug benefits coverage in accordance with Medicare Part D, refer to Note 2.

PROPERTY AND EQUIPMENT, NET

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Acquisitions — 72 72

Dispositions — ( 17 ) ( 17 )

Balance at December 31, 2025 $ 2,663 $ 7,023 $ 9,686

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

The following table presents details of our other intangible assets included in other long-term assets in the accompanying consolidated balance sheets at December 31, 2025 and 2024:

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Total other intangible assets 8.5 years $ 2,040 $ 912 $ 1,128 $ 2,436 $ 993 $ 1,443

Amortization expense for other intangible assets was approximately $ 60 million in 2024, $ 67 million in 2023, and $ 81 million in 2022.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

We recorded impairment charges of $ 200 million and $ 55 million relating to indefinite-lived intangible assets in 2024 and 2023, respectively.

Amortization expense for other intangible assets was approximately $ 51 million, $ 60 million and $ 67 million in 2025, 2024 and 2023, respectively.

We recorded impairment charges of $ 128 million, $ 200 million and $ 55 million relating to indefinite-lived intangible assets in 2025, 2024 and 2023 respectively.

We disposed $ 138 million of intangible assets in connection with the divestiture of a business in 2025.

The following table presents our estimate of amortization expense for each of the five next succeeding fiscal years:

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Right-of-use assets included within other long-term assets in our consolidated balance sheets were $ 485 million and $ 445 million at December 31, 2025 and December 31, 2024, respectively.

Operating lease liabilities included within trade accounts payable and accrued expenses in our consolidated balance sheets were $ 130 million and $ 149 million at December 31, 2024 and December 31, 2023, respectively.

Operating lease liabilities included

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

within trade accounts payable and accrued expenses in our consolidated balance sheets were $ 126 million and $ 130 million at December 31, 2025 and December 31, 2024, respectively.

Additionally, operating lease liabilities included within other long-term liabilities in our consolidated balance sheets were $ 418 million and $ 392 million at December 31, 2025 and December 31, 2024, respectively.

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For the years ended December 31, 2025, 2024 and 2023, cash paid for amounts included in the measurement of lease liabilities included within our operating cash flows was $ 140 million, $ 143 million and $ 166 million, respectively.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Maturity of Lease Liabilities December 31, 2025

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As most of our leases do not provide an implicit rate, we use our incremental borrowing rate, as adjusted for collateralized borrowings, based on the information available at date of adoption or commencement date in determining the present value of lease payments.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

BENEFITS PAYABLE

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The cumulative number of reported claims as of December 31, 2025 was approximately 229.1 million for claims incurred in 2025, 223.7 million for claims incurred in 2024, and 218.8 million for claims incurred in 2023.

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

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

Negative amounts reported for incurred related to prior years result from claims being ultimately settled for amounts less than originally estimated (favorable development).

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

As previously discussed, our reserving practice is to consistently recognize the actuarial best estimate of our ultimate liability for claims.

Actuarial standards require the use of assumptions based on moderately adverse experience, which generally results in favorable reserve development, or reserves that are considered redundant.

We experienced favorable medical claims reserve development related to prior fiscal years of $ 701 million in 2024, $ 872 million in 2023, and $ 415 million in 2022.

The medical claims reserve development for 2024, 2023, and 2022 primarily reflects the consistent application of trend and completion factors estimated using an assumption of moderately adverse conditions.

Our reserving practice is to consistently recognize the actuarial best estimate of our ultimate liability for claims, which generally results in favorable reserve development, or reserves that are considered redundant.

We experienced favorable medical claims reserve development related to prior fiscal years of $ 1.0 billion in 2025, $ 701 million in 2024, and $ 872 million in 2023.

The medical claims reserve development for 2025, 2024, and 2023 primarily reflects the consistent application of trend and completion factors.

The favorable development recognized in 2025 resulted primarily from trend factors and completion factors developing more favorably than originally expected.

The favorable development recognized in 2024 and 2023 primarily resulted from trend factors developing more favorably than originally expected.

The favorable development recognized in 2022 resulted primarily from trend factors developing more favorably than originally expected with completion factors remaining largely unchanged, resulting in lower overall development as compared to 2024 and 2023.

Incurred and Paid Claims Development

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The following tables provide information about incurred and paid claims development as of December 31, 2025, net of reinsurance.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Incurred Claims, Net of Reinsurance

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Benefits payable, net of reinsurance $ 9,967

For additional information regarding our benefits payable and benefits expense recognition, refer to Note 2 to the audited Consolidated Financial Statements included in Part II, Item 8, "Financial Statements and Supplementary Data" in this Form 10-K.

For additional information regarding our benefits payable and benefits expense recognition, refer to Note 2.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

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Federal $ 130 $ 566 $ 915

States and Puerto Rico 39 85 107

State and local 45 39 84

Foreign — — 1

Total current provision 175 605 1,000

Deferred benefit ( 192 ) ( 164 ) ( 100 )

Provision for income taxes $ 413 $ 836 $ 762

The provision for income taxes was different from the amount computed using the federal statutory rate for the years ended December 31, 2024, 2023 and 2022 due to the following:

Deferred tax expense (benefit)

Federal 89 ( 179 ) ( 178 )

State and local ( 14 ) ( 13 ) 6

Foreign — — 8

Total deferred tax expense (benefit) 75 ( 192 ) ( 164 )

Total provision for income taxes $ 250 $ 413 $ 836

The reconciliation of the income tax provision at the U.S.

statutory rate to the provision for income tax as reported for the years ended December 31, 2025, 2024 and 2023 are as follows:

2025 2024 2023

($ in millions)

Income tax provision at federal statutory rate $ 340 $ 698 $ 750

States, net of federal benefit, and Puerto Rico 36 61 49

Tax exempt investment income ( 3 ) ( 3 ) ( 3 )

Nondeductible executive compensation 31 19 30

State lookback review refund claims ( 17 ) — —

Tax effect from sale of Gentiva Hospice — — ( 72 )

Unrecognized Tax Benefits 29 37 —

Other, net ( 3 ) 24 8

Provision for income taxes $ 413 $ 836 $ 762

Deferred income tax balances reflect the impact of temporary differences between the tax bases of assets or liabilities and their reported amounts in our consolidated financial statements, and are stated at enacted tax rates expected to be in effect when the reported amounts are actually recovered or settled.

federal statutory tax rate $ 302 21.0 % $ 340 21.0 % $ 698 21.0 %

State and local income taxes, net of federal income tax effect ( 6 ) ( 0.4 ) % 14 0.9 % 76 2.3 %

Changes in unrecognized tax benefits 47 3.3 % 29 1.8 % 37 1.1 %

Gain/loss on acquisitions and dispositions ( 102 ) ( 7.1 ) % — — % ( 1 ) — %

Other adjustments 9 0.6 % 30 1.8 % 26 0.8 %

Provision for income taxes and effective income tax rate $ 250 17.4 % $ 413 25.5 % $ 836 25.2 %

The components of income before provision for income taxes for the years ended December 31, 2025, 2024 and 2023 are as follows:

2025 2024 2023

(in millions)

Domestic $ 1,485 $ 1,662 $ 3,351

Foreign ( 47 ) ( 42 ) ( 26 )

Total $ 1,438 $ 1,620 $ 3,325

As of December 31, 2025, the Company paid income taxes net of refund of $ 231 million for federal income taxes and $ 41 million for state and local income taxes ($ 20 million for the state of Florida, and $ 21 million for other states).

As of December 31, 2024, the Company paid income taxes net of refund of $ 506 million for federal income taxes and $ 64 million for state and local income taxes.

As of December 31, 2023, the Company paid income taxes net of refund of $ 903 million for federal income taxes, $ 92 million for state and local income taxes, and $ 2 million for foreign income taxes.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Principal components of our net deferred tax balances at December 31, 2025 and 2024 were as follows:

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(in millions)

Net operating loss carryforward $ 93 $ 84

Compensation and other accrued expense 171 218

Benefits payable $ 174 $ 217

Compensation and other accrued expense 172 171

Net operating loss carryforward 148 93

Deferred acquisition costs 35 39

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All deferred tax assets and liabilities are classified as noncurrent in our consolidated balance sheets as other long-term assets and liabilities at December 31, 2025 and 2024, respectively.

At December 31, 2024, we had approximately $ 16 million of federal net operating losses and approximately $ 1.1 billion of pre-apportioned state and Puerto Rico net operating losses to carry forward.

Valuation allowances are provided when it is considered more likely than not deferred tax assets will not be realized.

The valuation allowances primarily relate to future tax benefits on certain federal, state and non-U.S.

net operating loss carryforwards.

At December 31, 2025, we had approximately $ 0.5 million of federal net operating losses, $ 2.0 billion of pre-tax state net operating losses, and approximately $ 141 million of Puerto Rico net operating losses to carry forward.

A portion of these loss carryforwards, if not used to offset future taxable income, will expire from 2026 through 2042.

The balance of the net operating loss carryforwards has no expiration date.

The remaining balance of the net operating loss carryforwards has no expiration date.

Due to limitations and uncertainty regarding our ability to use some of the loss carryforwards and certain other deferred tax assets, a valuation allowance of $ 139 million was established.

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Internal Revenue Service, or IRS, has completed its examinations of our consolidated income tax returns for 2022 and prior years.

Our 2023 tax return is in the post-filing review period under the Compliance Assurance Process, or CAP.

Our 2024 tax return is under advance review by the IRS under CAP.

Our 2023 tax return is in the post-filing review period under the Compliance Assurance Process, or CAP, as we received a “no-change” letter in April of 2025.

For our 2024 tax return, we received a full acceptance letter under the CAP, indicating that we have completed the advance (pre‑filing) review stage.

With a few exceptions, which are immaterial in the aggregate, we are no longer subject to state, local and foreign tax examinations for years before 2021.

We are not aware of any material adjustments that may be proposed as a result of any ongoing or future examinations.

We do not have material uncertain tax positions reflected in our consolidated balance sheets.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

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Short-term debt:

Commercial paper $ — $ 871

Senior notes:

$ 600 million, 3.850 % due October 1, 2024

$ 600 million, 4.500 % due April 1, 2025

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Senior notes:

$ 600 million, 4.500 % due April 1, 2025

$ 500 million, 5.700 % due March 13, 2026

$ 750 million, 1.350 % due February 3, 2027

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$ 850 million, 5.950 % due March 15, 2034

$ 750 million, 5.550 % due May 1, 2035

$ 250 million, 8.150 % due June 15, 2038

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$ 1,000 million, 5.750 % due April, 15, 2054

$ 500 million, 6.000 % due May 1, 2055

Total long-term debt $ 12,369 $ 11,144

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Maturities of the short-term and long-term debt for the years ending December 31, are as follows:

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Thereafter 8,996

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Our senior notes, which are unsecured, may be redeemed at our option at any time at 100 % of the principal amount plus accrued interest and a specified make-whole amount.

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In addition, our senior notes contain a change of control provision that may require us to purchase the notes under certain circumstances.

We repaid the remaining $ 559 million aggregate principal amount of our 3.850 % senior notes on their maturity date of October 1, 2024.

In November 2024, we repaid our $ 500 million 5.700 % unsecured senior notes due March 13, 2026.

In March 2024, we issued $ 1.3 billion of 5.375 % unsecured senior notes due April 15, 2031 and $ 1.0 billion of 5.750 % unsecured senior notes due April 15, 2054.

In March 2025, we issued $ 750 million of 5.550 % unsecured senior notes due May 1, 2035, $ 500 million of 6.000 % unsecured senior notes due May 1, 2055, and an additional $ 250 million of our existing 5.375 % unsecured senior notes due April 15, 2031.

Our net proceeds, reduced for the underwriters' discounts and commissions paid, were $ 1.481 billion.

We used the net proceeds for general corporate purposes, which included the repayment of existing indebtedness, including borrowings under our commercial paper program.

We used the net proceeds of these offerings to repay the remaining $ 577 million aggregate principal amount of our 4.500 % unsecured senior notes on their maturity date of April 1, 2025.

The remaining net proceeds will be used for general corporate purposes, which may include the repayment of our existing indebtedness, including borrowings under our commercial paper program.

In May 2025, we entered into a Rule 10b5-1 Repurchase Plan to repurchase a portion of our $ 750 million aggregate principal amount of 1.350 % senior notes maturing in February 2027 and a portion of our $ 600 million aggregate principal amount of 3.950 % senior notes maturing in March 2027 during the period beginning on May 1, 2025 and ending on August 29, 2025.

For the period ended September 30, 2025, we repurchased $ 200 million principal amount of these senior notes for approximately $ 194 million cash.

In October 2025, we entered into a Rule 10b5-1 Repurchase Plan to repurchase a portion of our $ 750 million aggregate principal amount of 2.150 % senior notes maturing in February 2032, a portion of our $ 500 million aggregate principal amount of 3.125 % senior notes maturing in August 2029 and a portion of our $ 750 million aggregate principal amount of 3.700 % senior notes maturing in March 2029 during the period beginning on October 3, 2025 and ending on December 31, 2025.

For the period ended December 31, 2025, we repurchased $ 200 million principal amount of these senior notes for approximately $ 177 million cash.

We have entered into interest-rate swap agreements with major financial institutions to convert our interest-rate exposure on some of our senior notes payable from fixed rates to variable rates, based on Secured Overnight Financing Rate (SOFR), to align interest costs more closely with floating interest rates received on our cash equivalents and investment securities, as further described in Note 6.

As a result, the carrying value of these senior notes has been adjusted to reflect changes in value caused by an increase or decrease in interest rates.

The cumulative, aggregate adjustment to the carrying value of the senior notes was a decrease of approximately $ 129 million at December 31, 2024.

The cumulative, aggregate increase to the carrying value of the senior notes was approximately $ 6 million at December 31, 2025.

Revolving Credit Agreements

In June 2023, we entered into an amended and restated 5-year , $ 2.5 billion unsecured revolving credit agreement (replacing the 5-year , $ 2.5 billion unsecured revolving credit agreement entered in June 2021).

In May 2024, we entered into an amendment to increase commitments under the 5-year revolving credit agreement by $ 0.142 billion resulting in a $ 2.642 billion borrowing capacity.

In May 2024, we entered into a 364-day $ 2.1 billion unsecured revolving credit agreement (replacing the 364-day $ 1.5 billion unsecured revolving credit agreement entered in June 2023, which expired in accordance with its terms).

Under the credit agreements, at our option, we can borrow on either a competitive advance basis or a revolving credit basis.

In May 2025, we entered into an amended and restated 5-year , $ 5.0 billion unsecured revolving credit agreement.

The May 2025 revolving credit agreement (i) increases the amount of the commitments under our June 2023 revolving credit agreement from $ 2.642 billion to $ 5.0 billion and (ii) replaces our existing May 2024 364-day $ 2.1 billion unsecured revolving credit agreement, which expired in accordance with its terms.

Under the revolving credit agreement, at our option, we can borrow on either a competitive advance basis or a revolving credit basis.

The revolving credit portion bears interest at Term SOFR or the base rate plus a spread.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

competitive advance portion of any borrowings will bear interest at market rates prevailing at the time of borrowing on either a fixed rate or a floating rate based Term SOFR, at our option.

The SOFR spread, currently 114 basis points under the 5-year revolving credit agreement and 116 basis points under the 364-day revolving credit agreement, varies depending on our credit ratings ranging from 92.0 to 130.0 basis points under the 5-year revolving credit agreement and from 94.0 to 135.0 basis points under the 364-day revolving credit agreement.

The competitive advance portion of any borrowings will bear interest at market rates prevailing at the time of borrowing on either a fixed rate or a floating rate based Term SOFR, at our option.

The SOFR spread varies depending on our credit ratings ranging from 79.5 to 130.0 basis points.

As of December 31, 2025, our SOFR spread was 101.5 basis points.

We also pay an annual facility fee regardless of utilization.

This facility fee, currently 11.0 basis points, under the 5-year revolving credit agreement and 9.0 basis points under the 364-day revolving agreement, varies depending on our credit ratings ranging from 8.0 to 20.0 basis points under the 5-year revolving credit agreement and from 6.0 to 15.0 basis points under the 364-day revolving credit agreement.

This facility fee varies depending on our credit ratings ranging from 8.0 to 20.0 basis points.

As of December 31, 2025, our facility fee was 11.0 basis points.

The terms of our revolving credit agreements include standard provisions related to conditions of borrowing which could limit our ability to borrow additional funds.

In addition, our credit agreements contain customary restrictive covenants and a financial covenant regarding maximum debt to capitalization of 60 %, as well as customary events of default.

In addition, our credit agreements contain customary restrictive covenants and a financial covenant regarding maximum debt to capitalization of 60 %, as well as

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

customary events of default.

We are in compliance with this financial covenant, with actual debt to capitalization of 41.1 % as measured in accordance with the revolving credit agreements as of December 31, 2025.

Upon our agreement with one or more financial institutions, we may expand the aggregate commitments under the revolving credit agreements by up to $ 500 million, to a maximum of $ 5.25 billion, across the 5-year and 364-day revolving credit agreements.

At December 31, 2024, we had no borrowings and approximately $ 18 million of letters of credit outstanding under the revolving credit agreements.

Accordingly, as of December 31, 2024, we had $ 2.624 billion of remaining borrowing capacity under the 5-year revolving credit agreement and $ 2.1 billion of remaining borrowing capacity under the 364-day revolving credit agreement (which excludes the uncommitted $ 500 million of incremental loan facilities), none of which would be restricted by our financial covenant compliance requirement.

Upon our agreement with one or more financial institutions, we may expand the aggregate commitments under the revolving credit agreement by up to $ 1.0 billion, to a maximum of $ 6.0 billion.

At December 31, 2025, we had no borrowings and approximately $ 10 million of letters of credit outstanding under the revolving credit agreement.

Accordingly, as of December 31, 2025, we had $ 4.990 billion of remaining borrowing capacity under the credit agreement (which excludes the uncommitted $ 1.0 billion of incremental loan facilities), none of which would be restricted by our financial covenant compliance requirement.

We have other customary relationships, including financial advisory and banking, with some parties to the revolving credit agreements.

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The net proceeds of issuances have been and are expected to be used for general corporate purposes.

The maximum principal amount outstanding at any one time during the year ended December 31, 2024 was $ 2.7 billion, with none outstanding at December 31, 2024 compared to $ 871 million outstanding at December 31, 2023.

The maximum principal amount outstanding at any one time during the year ended December 31, 2025 was $ 1.2 billion, with no outstanding amount at December 31, 2025 and December 31, 2024.

Other Short-Term Borrowings

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

In 2023, we received a short-term cash advance of $ 100 million from FHLB with certain of our marketable securities as collateral and subsequently repaid the outstanding balance in December 2023.

At December 31, 2025 we had no outstanding short-term FHLB borrowings.

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The Company’s cash match is invested pursuant to the participant’s contribution direction.

Based on the closing price of our common stock of $ 253.71 on December 31, 2024, approximately 4 % of the retirement and savings plan’s assets were invested in our

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

common stock, or approximately 1.1 million shares, representing approximately 0.9 % of the shares outstanding as of December 31, 2024.

Based on the closing price of our common stock of $ 256.13 on December 31, 2025, approximately 3 % of the retirement and savings plan’s assets were invested in our common stock, or approximately 1.0 million shares, representing approximately 0.9 % of the shares outstanding as of December 31, 2025.

At December 31, 2025, approximately 5.1 million shares of our common stock were reserved for issuance under our defined contribution retirement savings plans.

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Accordingly, upon retirement the earned portion of the current tranche will continue to vest on the originally scheduled vest date and any remaining unearned portion of the award will be forfeited.

Our equity award program includes a retirement provision that generally treats associates with a combination of age and years of services with the Company totaling 65 or greater, with a minimum required age of 55 and a minimum requirement of 5 years of service, as retirement-eligible.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

55 and a minimum requirement of 5 years of service, as retirement-eligible.

Upon exercise, stock-based compensation awards are settled with authorized but unissued company stock or treasury stock.

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Stock-based compensation expense, net of tax $ 197 $ 178 $ 147

The tax benefit recognized in our consolidated financial statements is based on the amount of compensation expense recorded for book purposes, subject to limitations on the deductibility of annual compensation in excess of $500,000 per employee as mandated by the Health Care Reform Law.

The actual tax benefit realized in our tax return is based on the intrinsic value, or the excess of the market value over the exercise or purchase price, of stock options exercised and restricted stock vested during the period, subject to limitations on the deductibility of annual compensation in excess of $500,000 per employee as mandated by the Health Care Reform Law.

The actual tax benefit realized for the deductions taken on our tax returns from option exercises and restricted stock vesting totaled $ 27 million in 2025, $ 21 million in 2024, and $ 30 million in 2023.

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At December 31, 2025, there were approximately 13.7 million shares reserved for stock award plans under the Humana Inc.

2011 Stock Incentive Plan, or 2011 Plan, and approximately 14.3 million shares reserved for stock award plans under the Humana Inc.

2019 Stock Incentive Plan, or 2019 Plan.

These reserved shares included giving effect to, under the 2011 Plan, 3.3 million shares of common stock available for future grants assuming all stock options were granted or 1.4 million shares available for future grants assuming all restricted stock were granted.

These reserved shares included giving effect to, under the 2019 Plan, 7.5 million shares of common stock available for future grants assuming all stock options were granted or 2.2 million shares available for future grants assuming all restricted stock were granted.

Shares may be issued from authorized but unissued company stock or treasury stock.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Amended & Restated Plan, or 2019 Plan.

These reserved shares included giving effect to, under the Amended & Restated Plan, 4.4 million shares of common stock available for future grants assuming all stock options were granted or 1.3 million shares available for future grants assuming all restricted stock were granted.

Shares may only be issued from the Amended & Restated Plan, as any shares remaining in all other historical equity plans are not available for issuance.

Restricted Stock

Restricted stock is granted with a fair value equal to the market price of our common stock on the date of grant and generally vests in equal annual tranches over a three year period from the date of grant.

Certain of our restricted stock grants also include performance-based conditions generally associated with return on invested capital and strategic membership growth.

Certain of our restricted stock grants also include performance-based conditions generally associated with strategic measures aligned with our growth objectives.

Restricted stock units have forfeitable dividend equivalent rights equal to the dividend paid on common stock.

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Nonvested restricted stock at December 31, 2025 1,231 $ 319.91

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Approximately 31 % of the nonvested restricted stock at December 31, 2025 included performance-based conditions.

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Exercise provisions vary, but most options vest in whole or in part 1 to 3 years after grant and expire 7 years after grant.

In 2025, no stock options were granted.

The weighted-average fair value of each option granted during 2024 and 2023 is provided below.

The fair value was estimated on the date of grant using the Black-Scholes pricing model with the weighted-average assumptions indicated below:

2024 2023 2022

Weighted-average fair value at grant date $ 96.42 $ 130.74

Expected option life (years) 3.5 years 3.0 years 3.6 years

Expected option life (years) 3.5 years 3.0 years

Expected volatility 28.8 % 31.6 %

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Treasury bond with a term substantially equal to the option’s expected term.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

The volatility used to value employee stock options is based on historical volatility.

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Options outstanding at December 31, 2024 375 $ 404.61

Granted 149 385.05

Exercised ( 1 ) 259.26

Forfeited ( 21 ) 375.21

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As of December 31, 2025, exercisable stock options had no intrinsic value, and a weighted-average remaining contractual term of 3.1 years.

The total intrinsic value of stock options exercised during 2024 was $ 0.1 million, compared with $ 3 million during 2023 and $ 32 million during 2022.

Cash received from stock option exercises totaled $ 0.3 million in 2024, $ 9 million in 2023, and $ 51 million in 2022.

There was no intrinsic value of stock options exercised during 2025, compared with $ 0.1 million during 2024 and $ 3 million during 2023.

No cash was received from stock option exercises in 2025.

Cash received from stock option exercises totaled $ 0.3 million in 2024 and $ 9 million in 2023.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Total compensation expense not yet recognized related to nonvested options was $ 6 million at December 31, 2025.

We expect to recognize this compensation expense over a weighted-average period of approximately 1.8 years.

We expect to recognize this compensation expense over a weighted-average period of approximately 1 year.

EARNINGS PER COMMON SHARE COMPUTATION

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excluded from computation 895 814 207

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

STOCKHOLDERS’ EQUITY

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Under our share repurchase authorization, shares may have been purchased from time to time at prevailing prices in the open market, by block purchases, through plans designed to comply with Rule 10b5-1 under the Securities Exchange Act of 1934, as amended, or in privately-negotiated transactions (including pursuant to accelerated share repurchase agreements with investment banks), subject to certain regulatory restrictions on volume, pricing, and timing.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Effective February 16, 2024, the Board of Directors replaced the February 2023 repurchase authorization (of which approximately $ 824 million remained unused) with a new share repurchase authorization for repurchases of up to $ 3 billion of our common shares exclusive of shares repurchased in connection with employee stock plans, expiring as of February 15, 2027, which we refer to as the 2024 repurchase authorization.

During the year ended December 31, 2024, we repurchased approximately 0.2 million common shares in open market transactions under the 2024 repurchase authorization for $ 74 million at an average price of $ 339.55 and approximately 1.7 million common shares in open market transactions under the February 2023 repurchase authorization for $ 676 million at an average price of $ 390.30 .

During the year ended December 31, 2025, we repurchased 0.4 million shares in open market transactions for $ 100 million.

These shares were repurchased at an average price of $ 233.73 under the February 2024 share repurchase authorization.

During the year ended December 31, 2024, we repurchased 1.9 million shares in open market transactions for $ 750 million.

These shares were repurchased at an average price of $ 384.65 under the February 2023 and 2024 share repurchase authorizations.

Our remaining repurchase authorization was $ 2.7 billion as of February 18, 2026.

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In connection with employee stock plans, we acquired 0.2 million common shares for $ 51 million in 2025, 0.2 million common shares for $ 46 million in 2024, and 0.2 million common shares for $ 73 million in 2023.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Regulatory Requirements

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Actual dividends that were paid to our parent company were approximately $ 1.1 billion in 2025, $ 1.5 billion in 2024, and $ 1.8 billion in 2023.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

COMMITMENTS, GUARANTEES AND CONTINGENCIES

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and the appropriate timing of the transaction.

We have purchase obligation commitments of $ 647 million in 2025, $ 469 million in 2026, $ 342 million in 2027, $ 234 million in 2028, and $ 205 million in 2029.

We have purchase obligation commitments of $ 1.2 billion in 2026, $ 953 million in 2027, $ 595 million in 2028, $ 298 million in 2029, and $ 273 million in 2030.

Purchase obligations exclude agreements that are cancellable without penalty.

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Historically, payments made related to these indemnifications have been immaterial.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Government Contracts

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These contracts are renewed generally for a calendar year term unless CMS notifies us of its decision not to renew by May 1 of the calendar year in which the contract would end, or we notify CMS of our decision not to renew by the first Monday in June of the calendar year in which the contract would end.

All material contracts between Humana and CMS relating to our Medicare products have been renewed for 2025, and all of our product offerings filed with CMS for 2025 have been approved.

CMS uses a risk-adjustment model which adjusts premiums paid to Medicare Advantage, or MA, plans according to health status of covered members.

All material contracts between Humana and CMS relating to our Medicare products have been renewed for 2026, and all of our product offerings filed with CMS and going to market for 2026 have been approved.

CMS uses a risk-adjustment model that adjusts premiums paid to Medicare Advantage, or MA, plans according to health status of covered members.

The risk-adjustment model, which CMS implemented pursuant to the Balanced Budget Act of 1997 (BBA) and the Benefits Improvement and Protection Act of 2000 (BIPA), generally pays more where a plan's membership has higher expected costs.

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Under the risk-adjustment methodology, all MA plans must collect from providers and submit the necessary diagnosis code information to CMS within prescribed deadlines.

The CMS risk-adjustment model uses the diagnosis data, collected from providers, to calculate the health status-related risk-adjusted premium payment to MA plans, which CMS further adjusts for coding pattern differences between the health plans and the government fee-for-service (FFS) program.

The CMS risk-adjustment model uses the diagnosis data, collected from providers, to calculate the health status-related risk-adjusted premium payment to

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

MA plans, which CMS further adjusts for coding pattern differences between the health plans and the government fee-for-service (FFS) program.

We generally rely on providers, including certain providers in our network who are our employees, to code their claim submissions with appropriate diagnoses, which we send to CMS as the basis for our health status-adjusted payment received from CMS under the actuarial risk-adjustment model.

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In 2012, CMS released an MA contract-level RADV methodology that would extrapolate the results of each CMS RADV audit sample to the audited MA contract’s entire health status-related risk adjusted premium amount for the year under audit.

In doing so, CMS recognized “that the documentation standard used in RADV audits to determine a contract’s payment error (medical records) is different from the documentation standard used to develop the Part C risk-adjustment model (FFS claims).” To correct for this difference, CMS stated that it would apply a “Fee-for-Service Adjuster (FFS Adjuster)” as “an offset to the preliminary recovery amount.” This adjuster would be “calculated by CMS based on a RADV-like review of records submitted to support FFS claims data.” CMS stated that this methodology would apply to audits beginning with PY 2011.

Humana relied on CMS’s 2012 guidance in submitting MA bids to CMS.

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In October 2018, however, CMS issued a proposed rule announcing possible changes to the RADV audit methodology, including elimination of the FFS Adjuster.

CMS proposed applying its revised methodology, including extrapolated recoveries without application of a FFS Adjuster, to RADV audits dating back to PY 2011.

CMS proposed (the "Proposed RADV Rule") applying its revised methodology, including extrapolated recoveries without application of a FFS Adjuster, to RADV audits dating back to PY 2011.

On January 30, 2023, CMS published a final rule related to the RADV audit methodology (Final RADV Rule).

The Final RADV Rule confirmed CMS’s decision to eliminate the FFS Adjuster.

The Final RADV Rule states CMS’s intention to extrapolate results from CMS and HHS-OIG RADV audits beginning with PY 2018, rather than PY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

2011 as proposed.

The Final RADV Rule states CMS’s intention to extrapolate results from CMS and HHS-OIG RADV audits beginning with PY 2018, rather than PY 2011 as proposed.

However, CMS’s Final RADV Rule does not adopt a specific sampling, extrapolation or audit methodology.

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CMS confirmed its intent to apply the Final RADV Rule, including the first application of extrapolated audit results to determine audit settlements without the use of a FFS Adjuster, to CMS audits conducted for PY 2018 and subsequent years when it selected certain of Humana's MA contracts for PY 2018 RADV audits.

The Final RADV Rule, including the lack of a FFS Adjuster, and any related regulatory, industry or company reactions, could have a material adverse effect on our results of operations, financial position, or cash flows.

Further, on May 21, 2025, CMS announced that it will conduct RADV audits for all eligible MA contracts for each payment year in all newly initiated audits and expedite the completion of RADV audits for PY 2018 through PY 2024 by early 2026.

The Final RADV Rule, including the lack of a FFS Adjuster, and any related regulatory, industry or company reactions, the expansion of CMS's auditing efforts to include all eligible MA contracts, the acceleration of RADV audits for PY 2018 through PY 2024, other changes CMS may make to the RADV audit methodology for these years, and combination of these expanded auditing efforts with the application of the Final RADV Rule, could each have a material adverse effect on our results of operations, financial position, or cash flows.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

On September 1, 2023, Humana Inc.

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filed suit against the United States Department of Health and Human Services, and Xavier Becerra in his official capacity as Secretary, in the United States District Court, Northern District of Texas, Fort Worth Division seeking a determination that the Final RADV Rule violates the APA and should be set aside.

On September 25, 2025, the Court granted our motion for summary judgment and vacated the Final RADV Rule, finding that the Final RADV Rule was procedurally invalid under the APA because it was not a “logical outgrowth” of the Proposed RADV Rule.

On November 21, 2025, the government notified the court of its appeal of that decision, which is now pending at the United States Court of Appeals for the Fifth Circuit and captioned Humana v Kennedy.

There can be no assurances as to the final disposition of this lawsuit.

We remain committed to working alongside CMS to promote the integrity of the MA program as well as affordability and cost certainty for our members.

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As such, the result of these reviews may have a material adverse effect on our results of operations, financial position, or cash flows.

Our state-based Medicaid business accounted for approximately 8 % of our total premiums and services revenue for the year ended December 31, 2024 primarily serving members enrolled in Medicaid, and in certain circumstances members who qualify for both Medicaid and Medicare, under contracts with various states.

Our military services business, which accounted for approximately 1 % of our total premiums and services revenue for the year ended December 31, 2024, primarily consisted of the TRICARE T2017 East Region contract.

We delivered services under the T2017 East Region contract from commencement on January 1, 2018 through expiration on December 31, 2024.

The T2017 East Region contract comprised 32 states and approximately 6 million TRICARE beneficiaries.

In December 2022, we were awarded the next generation of TRICARE Managed Care Support Contracts, or T-5, for the updated TRICARE East Region by the Defense Health Agency of the DoD.

The T-5 East Region contract commenced on January 1, 2025 and comprises 24 states, and Washington D.C., and approximately 4.6 million beneficiaries.

The transition period for the T-5 contract began in January 2024 and overlapped the final year of the T2017 contract.

The length of the contract is one transition year followed by eight annual option periods, which, if all options are exercised, would result in a total contract length of nine years .

The loss of any of the contracts above or significant changes in these programs as a result of legislative or regulatory action, including reductions in premium payments to us, regulatory restrictions on profitability, including reviews by regulatory bodies that may compare our Medicare Advantage profitability to our non-Medicare Advantage business profitability, or compare the profitability of various products within our Medicare Advantage business, and require that they remain within certain ranges of each other, or increases in member benefits or member eligibility criteria without corresponding increases in premium payments to us, may have a material adverse effect on our results of operations, financial position, and cash flows.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Our state-based Medicaid business, which accounted for approximately 10 % of our total premiums and services revenue for the year ended December 31, 2025, primarily served members enrolled in Medicaid, and in certain circumstances members who qualify for both Medicaid and Medicare, under contracts with various states.

The loss of any of the contracts above or significant changes in these programs as a result of legislative or regulatory action, including reductions in premium payments to us, regulatory restrictions on profitability, or increases in member benefits or member eligibility criteria without corresponding increases in premium payments to us, may have a material adverse effect on our results of operations, financial position, and cash flows.

Legal Proceedings and Certain Regulatory Matters

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We continue to cooperate with the Department of Justice on these requests.

On January 19, 2016, an individual filed a qui tam suit captioned United States of America ex rel.

Steven Scott v.

Humana Inc in United States District Court, Western District of Kentucky, Louisville division.

As previously disclosed, during 2023, we accrued certain anticipated expenses in connection with this matter.

On August 15, 2024, Humana settled the claims in this suit, and paid the United States $ 90 million.

On September 1, 2023, Humana Inc.

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There is no assurance that we will prevail in the lawsuit.

September 25, 2025, the Court granted our motion for summary judgment and vacated the Final RADV Rule, finding that the Final RADV Rule was procedurally invalid under the APA because it was not a "logical outgrowth" of the Proposed RADV Rule.

There can be no assurances as to the final disposition of this lawsuit.

See “Government Contracts” in this Note 17 for additional information regarding this matter.

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The case, now captioned In re Humana Inc.

Securities Litigation, alleges that between July 2022 and October 2024, Humana made false or misleading statements in its periodic SEC filings and statements to the financial markets about our financial performance and the medical costs and Star Ratings in our Medicare Advantage business.

Securities Litigation, alleges that between July 2022 and October 2024, Humana made false or misleading statements in its periodic SEC filings and statements to the financial markets about our financial performance and the medical costs, Star Ratings and certain distribution relationships with respect to our Medicare Advantage business.

The action seeks, among other things, unspecified compensatory damages and attorneys' fees.

Between July and November 2024, parallel stockholder derivative actions captioned Silva v.

Broussard, Spikes v.

Broussard, and Noble v.

Broussard, respectively, were filed in the United States District Court for the Western District of Kentucky alleging that the same claimed acts and omissions underlying the federal securities law case also constitute a breach of fiduciary duty by certain of our current and former directors and executive officers.

Between July 2024 and March 2025, parallel stockholder derivative

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

actions were filed in the United States District Court for the Western District of Kentucky, now consolidated and captioned In re Humana Shareholder Derivative Action, and Nicolaou v.

Broussard, was filed in Commonwealth of Kentucky, Jefferson Circuit Court, alleging that the same claimed acts and omissions underlying the federal securities law case, as well as certain Medicare Advantage distribution relationships, also constitute a breach of fiduciary duty by certain of our current and former directors and executive officers.

The actions seek, among other things, reforms to the Company's corporate governance and internal procedures, unspecified damages and attorneys' fees.

We will vigorously defend against the allegations in all cases.

On October 18, 2024, Humana Inc., along with co-plaintiff Americans for Beneficiary Choice, filed suit against the United States Department of Health and Human Services, Centers for Medicare and Medicaid Services, Xavier Becerra in his official capacity as Secretary, and Chiquita Brooks-LaSure, in her official capacity as Administrator, in the United States District Court, Northern District of Texas, Fort Worth Division, seeking a determination that they violated the Administrative Procedure Act in administering the Medicare Advantage and Part D Star Ratings program.

We seek to set aside and vacate Humana’s 2025 Star Ratings and remand the matter to CMS for recalculation and to declare that CMS’s policy refusing to disclose all relevant data and information is arbitrary, capricious, and unlawful.

There is no assurance that we will prevail in the lawsuit.

On October 18, 2024, Humana Inc., along with co-plaintiff Americans for Beneficiary Choice, filed suit against the United States Department of Health and Human Services and its Secretary, Centers for Medicare and Medicaid Services, and its Administrator, in the United States District Court, Northern District of Texas, Fort Worth Division, seeking a determination that they violated the Administrative Procedure Act in administering the Medicare Advantage and Part D Star Ratings program.

On October 14, 2025, the Court issued a decision rejecting our challenge to the 2025 Star Ratings.

On November 25, 2025, we notified the court of our appeal, which is now pending at the United States Court of Appeals for the Fifth Circuit.

There is no assurance that we will ultimately prevail in the lawsuit.

For additional information on this matter, refer to Part I, Item 1A, "Risk Factors" of this Form 10-K.

On May 1, 2025, the Department of Justice (DOJ) filed a complaint in partial intervention related to a qui tam lawsuit filed by an individual formerly employed by eHealth, Inc., in the United States District Court for the District of Massachusetts.

The intervened lawsuit is captioned United States of America ex.

Andrew Shea v.

eHealth, Inc., et al., Case No.

1:21-cv-11777-DJC.

The complaint alleges certain civil violations in connection with non-commission payments Humana made to three call center broker partners.

The complaint also includes allegations relating to Humana’s marketing of Medicare Advantage plans to Medicare-eligible beneficiaries under the age of 65.

The action seeks damages and penalties on behalf of the United States under the federal False Claims Act.

The court ordered the qui tam action unsealed following the filing of DOJ’s complaint in partial intervention on May 1, 2025.

We take seriously our obligations to comply with applicable regulatory requirements and laws, and will vigorously defend against these allegations.

On December 30, 2025, the United States Court of Appeals for the Sixth Circuit denied Humana’s petition for permission to appeal a district court order certifying a class in the action of David Elliott v Humana Inc ., alleging violations of the Telephone Consumer Protection Act (“TCPA”), 47 U.S.C.

The class action will proceed in the United States District Court, Western District of Kentucky.

We take seriously our obligations to comply with TCPA and other consumer privacy requirements, and we will vigorously defend against these allegations.

Other Lawsuits and Regulatory Matters

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We continue to be subject to these reviews, which could result in additional fines or other sanctions being imposed on us or additional changes in some of our practices.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

We also are involved in various other lawsuits that arise, for the most part, in the ordinary course of our business operations, certain of which may be styled as class-action lawsuits.

Among other matters, this litigation may include employment matters, claims of medical malpractice, bad faith, personal injury, nonacceptance or termination of providers, anticompetitive practices, improper rate setting, provider contract rate and payment disputes, including disputes over reimbursement rates required by statute, disputes arising from competitive procurement process, general contractual matters, intellectual property matters, and challenges to subrogation practices.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Under state guaranty assessment laws, including those related to state cooperative failures in the industry, we may be assessed (up to prescribed limits) for certain obligations to the policyholders and claimants of insolvent insurance companies that write the same line or lines of business as we do.

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Our Chief Executive Officer, the Chief Operating Decision Maker, utilizes these segment groupings and results of each segment, measured by income (loss) from operations, to assess performance and allocate resources primarily during our annual budget process and periodic forecast updates.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

The Insurance segment consists of Medicare benefits, marketed to individuals or directly via group Medicare accounts, as well as our contract with CMS to administer the Limited Income Newly Eligible Transition, or LI-NET, prescription drug plan program and contracts with various states to provide Medicaid, dual eligible demonstration, and Long-Term Support Services benefits, which we refer to collectively as our state-based contracts.

This segment also includes products consisting of employer group commercial fully-insured medical and specialty health insurance benefits marketed to individuals and employer groups, including dental, vision, and other supplemental health benefits, as well as administrative services only, or ASO.

This segment also includes products consisting of specialty health insurance benefits marketed to individuals and employer groups, including dental, vision, and other supplemental health benefits.

In addition, our Insurance segment includes our Military services business, primarily our T-5 East Region contract, as well as the operations of our PBM business.

No other Humana health plan offerings are materially affected.

We anticipate the exit of this line of business to be finalized in the first half of 2025.

The CenterWell segment includes our pharmacy, primary care, and home solutions operations.

The segment also includes our strategic partnerships with WCAS to develop and operate senior-focused, payor-agnostic, primary care centers, as well as our minority ownership interest in hospice operations.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

The CenterWell segment includes our pharmacy solutions, primary care, and home solutions operations.

Services offered by this segment are designed to enhance the overall healthcare experience.

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As a result, the cost of providing benefits to our members, whether provided via a third-party provider or internally through a stand-alone subsidiary, is classified as benefits expense and excludes the portion of the cost for which the health plans do not bear responsibility, including member co-share amounts and government subsidies of $ 14.1 billion in 2025, $ 20.3 billion in 2024, and $ 20.7 billion in 2023.

In addition, depreciation and amortization expense associated with certain businesses delivering benefits to our members, primarily associated with our primary care and pharmacy operations, are included with benefits expense.

The amount of this expense was $ 125 million in 2025, $ 129 million in 2024, and $ 138 million in 2023.

Other than those described previously, the accounting policies of each segment are the same and are described in Note 2.

Transactions between reportable segments primarily consist of sales of products and services rendered by our CenterWell segment, primarily pharmacy, primary care, and home solutions, to our Insurance segment customers.

Transactions between reportable segments primarily consist of sales of products and services rendered by our CenterWell segment, primarily pharmacy solutions, primary care, and home solutions, to our Insurance segment customers.

Intersegment sales and expenses are recorded primarily at fair value and eliminated in consolidation.

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The remaining reinsurance recoverables of $ 13 million are divided between 7 other reinsurers, with none subject to funds withheld accounts or other financial guarantees supporting the repayment of these amounts.

During 2025, we entered an agreement with an unrelated insurer that does not qualify for reinsurance accounting under GAAP, and is accounted for using deposit accounting accordingly.

We entered into this contract to minimize the risk of catastrophic loss, reducing capital and surplus requirements.

Total deposit assets and liabilities related to the reinsurance agreement that does not qualify for reinsurance accounting under GAAP was not material as of December 31, 2025.

Report of Independent Registered Public Accounting Firm

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Definition and Limitations of Internal Control over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in

accordance with generally accepted accounting principles.

A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company;

(ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company;

(ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance

with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company;

and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

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Management develops its estimate for IBNR using actuarial methodologies and assumptions, primarily based upon historical claim experience.

Actuarial standards of practice generally require a level of confidence such that the liabilities established for IBNR have a greater probability of being adequate versus being insufficient.

For periods prior to the most recent two months, a completion factor method uses historical paid claims patterns to estimate the percentage of claims incurred during a given period that have historically been adjudicated as of the reporting period.

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The principal considerations for our determination that performing procedures relating to the valuation of IBNR is a critical audit matter are (i) the significant judgment by management when developing the estimate of IBNR;

(ii) a high degree of auditor judgment, subjectivity and effort in performing procedures and evaluating the actuarial methodologies and management’s significant assumptions related to completion factors, per member per month claims trends, and the potential for moderately adverse conditions;

and (iii) the audit effort involved the use of professionals with specialized skill and knowledge.

Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements.

These procedures included testing the effectiveness of controls relating to the valuation of IBNR, including controls over the actuarial methodologies and development of significant assumptions related to completion factors, per member per month claims trends, and the potential for moderately adverse conditions.

These procedures also included, among others, the involvement of professionals with

specialized skill and knowledge to assist in developing an independent estimate of IBNR.

This independent estimate includes a range of reasonable outcomes, including outcomes under moderately adverse conditions, which are compared to management’s estimate of IBNR.

These procedures also included, among others, the involvement of professionals with specialized skill and knowledge to assist in developing an independent estimate of IBNR.

This independent estimate includes a range of reasonable outcomes which are compared to management’s estimate of IBNR.

Developing the independent estimate involved developing independent completion factors and per member per month claims trends assumptions using management’s data, testing the completeness and accuracy of data provided by management, and evaluating the reasonableness of management’s assumptions.

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As described in Notes 2 and 9 to the consolidated financial statements, the Company’s goodwill balance was $9.7 billion as of December 31, 2025, of which $4.4 billion relates to the Home Solutions reporting unit.

The Company’s other intangible assets balance was $1.4 billion as of December 31, 2024, of which $0.9 billion relates to the Certificates of Need intangible assets.

The Company’s

other intangible assets balance was $1.1 billion as of December 31, 2025, of which $0.8 billion relates to the Certificates of Need intangible assets.

Impairment tests are performed, at a minimum, in the fourth quarter of each year and more frequently if adverse events or changes in circumstances indicate that the asset may be impaired.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 8. Financial Statements and Supplementary Data