Income Taxes (Tables)

12 Months Ended

Dec. 31, 2019

Income Tax Disclosure [Abstract]

Provision for income taxes

Income tax expense (benefit) consisted of the following:

	Year Ended December 31,
	2019			2018			2017
	(In millions)
Current:
Federal	$	204		$	272		$	(9	)
State	12			18			3
Foreign	9			8			—
Total current	225			298			(6		)
Deferred:
Federal	5			(3		)	(85		)
State	6			(3		)	(9		)
Foreign	(1		)	—			—
Total deferred	10			(6		)	(94		)
Income tax expense (benefit)	$	235		$	292		$	(100	)

Effective income tax rate reconciliation to the statutory federal income tax rate

A reconciliation of the U.S. federal statutory income tax rate to the combined effective income tax rate is as follows:

	Year Ended December 31,
	2019		2018		2017
Statutory federal tax (benefit) rate	21.0	%	21.0	%	(35.0	)%
State income provision (benefit), net of federal	1.4		1.2		(0.7	)
Nondeductible health insurer fee (“HIF”)	—		7.3		—
Nondeductible compensation	1.2		0.7		2.8
Nondeductible goodwill impairment	—		—		6.6
Worthless stock deduction	—		(1.0	)	—
Revaluation of net deferred tax assets	—		(0.4	)	8.8
Other	0.6		0.4		1.1
Effective tax expense (benefit) rate	24.2	%	29.2	%	(16.4	)%

Significant components of deferred tax assets and liabilities

Significant components of our deferred tax assets and liabilities as of December 31, 2019 and 2018 were as follows:

	December 31,
	2019			2018
	(In millions)
Accrued expenses and reserve liabilities	$	35		$	39
Other accrued medical costs	11			12
Net operating losses	13			16
Fixed assets and intangibles	26			30
Unearned premiums	11			9
Lease financing obligation	5			30
Tax credit carryover	11			12
Other	—			3
Valuation allowance	(24		)	(28		)
Total deferred income tax assets, net of valuation allowance	88			123
Prepaid expenses	(6		)	(6		)
Other	(3		)	—
Total deferred income tax liabilities	(9		)	(6		)
Net deferred income tax asset	$	79		$	117

Unrecognized tax benefits roll forward

The roll forward of our unrecognized tax benefits is as follows:

	Year Ended December 31,
	2019			2018			2017
	(In millions)
Gross unrecognized tax benefits at beginning of period	$	(20	)	$	(13	)	$	(11	)
Increases in tax positions for current year				(9		)	(1		)
Increases in tax positions for prior years	—			—			(4		)
Decreases in tax positions for prior years	—			—			3
Lapse in statute of limitations				2			—
Gross unrecognized tax benefits at end of period	$	(20	)	$	(20	)	$	(13	)