INCOME TAXES

The provision for income taxes consisted of the following for the years ended December 31, 2015, 2014 and 2013:



	2015			2014			2013
	(in millions)
Current provision:
Federal	$	1,067		$	1,006		$	595
States and Puerto Rico	90			81			53
Total current provision	1,157			1,087			648
Deferred (benefit) provision	(2		)	(64		)	42
Provision for income taxes	$	1,155		$	1,023		$	690

The provision for income taxes was different from the amount computed using the federal statutory rate for the years ended December 31, 2015, 2014 and 2013 due to the following:



	2015			2014			2013
	(in millions)
Income tax provision at federal statutory rate	$	851		$	759		$	672
States, net of federal benefit, and Puerto Rico	44			48			32
Tax exempt investment income	(24		)	(27		)	(26		)
Health insurer fee	314			204			—
Nondeductible executive compensation	18			22			6
Concentra sale	(67		)	—			—
Other, net	19			17			6
Provision for income taxes	$	1,155		$	1,023		$	690

The provision for income taxes for 2015, 2014, and 2013 reflects an $18 million, $22 million, and $6 million, respectively, estimated impact from limitations on the deductibility of annual compensation in excess of $500,000 per employee as mandated by the Health Care Reform Law. As of December 31, 2015, we do not have material uncertain tax positions reflected in our consolidated balance sheet.

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. Principal components of our net deferred tax balances at December 31, 2015 and 2014 were as follows, excluding Concentra amounts classified as held-for-sale at December 31, 2014 for comparative purposes. The net deferred tax liability associated with Concentra and classified as held-for sale at December 31, 2014 was $55 million.



	Assets (Liabilities)
	2015			2014
	(in millions)
Future policy benefits payable	$	200		$	320
Compensation and other accrued expenses	130			168
Benefits payable	267			138
Net operating loss carryforward	47			52
Deferred acquisition costs	64			57
Unearned revenues	22			21
Other	13			17
Total deferred income tax assets	743			773
Valuation allowance	(42		)	(48		)
Total deferred income tax assets, net of valuation allowance	701			725
Depreciable property and intangible assets	(363		)	(346		)
Investment securities	(37		)	(168		)
Prepaid expenses	(45		)	(55		)
Total deferred income tax liabilities	(445		)	(569		)
Total net deferred income tax assets	$	256		$	156
Amounts recognized in the consolidated balance sheets:
Other current assets	$	—		$	79
Other long-term assets	256			77
Total net deferred income tax assets	$	256		$	156

In November 2015, the FASB issued new guidance related to accounting for income taxes which changes the balance sheet classification of deferred taxes, requiring deferred tax liabilities and assets be classified as noncurrent in a classified statement of financial position. We elected to early adopt the guidance and have classified all deferred tax liabilities and assets as noncurrent in our consolidated balance sheet at December 31, 2015 to simplify their presentation. Prior periods were not retrospectively adjusted. If we had retrospectively adjusted our consolidated balance sheet, our other current assets would have declined by $79 million and, similarly, our other long-term assets would have increased by $79 million at December 31, 2014.

At December 31, 2015, we had approximately $126 million of net operating losses to carry forward related to prior acquisitions and our Puerto Rico subsidiaries. These net operating loss carryforwards, if not used to offset future taxable income, will expire from 2016 through 2033. Due to limitations and uncertainty regarding our ability to use some of the carryforwards, a valuation allowance was established on $105 million of these net operating loss carryforwards and $7 million of other items related to Puerto Rico. For the remainder of the net operating loss carryforwards and other cumulative temporary differences, based on our historical record of producing taxable income and profitability, we have concluded that future operating income will be sufficient to give rise to tax expense to recover all deferred tax assets.

We provide for income taxes on the undistributed earnings of our Puerto Rico operations using that jurisdiction’s tax rate, which has been lower historically than the U.S. statutory tax rate. Permanent investment of these earnings has resulted in cumulative unrecognized deferred tax liabilities of approximately $30 million as of December 31, 2015.

We file income tax returns in the United States and certain foreign jurisdictions. The U.S. Internal Revenue Service, or IRS, has completed its examinations of our consolidated income tax returns for 2013 and prior years. Our 2014 tax return is in the post-filing review period under the Compliance Assurance Process (CAP). Our 2015 tax return is under advance review by the IRS under CAP. With few exceptions, which are immaterial in the aggregate, we no longer are subject to state, local and foreign tax examinations for years before 2012. As of December 31, 2015, we are not aware of any material adjustments that may be proposed.