INCOME TAXES

12 Months Ended

Dec. 31, 2023

Income Tax Disclosure [Abstract]

INCOME TAXES

INCOME TAXES

The provision for income taxes consisted of the following for the years ended December 31, 2023, 2022 and 2021:

	2023		2022		2021
	(in millions)
Current provision:
Federal	$	915	$	755	$	466
States and Puerto Rico	85		107		4
Total current provision	1,000		862		470
Deferred (benefit) expense	(164)		(100)		15
Provision for income taxes	$	836	$	762	$	485

The provision for income taxes was different from the amount computed using the federal statutory rate for the years ended December 31, 2023, 2022 and 2021 due to the following:

	2023		2022		2021
	(in millions)
Income tax provision at federal statutory rate	$	698	$	750	$	718
States, net of federal benefit, and Puerto Rico	61		49		18
Tax exempt investment income	(3)		(3)		(3)
Nondeductible executive compensation	19		30		33
Non-taxable KAH gain	—		—		(264)
Tax effect from sale of Gentiva Hospice	—		(72)		—
Unrecognized Tax Benefits	37		—		—
Other, net	24		8		(17)
Provision for income taxes	$	836	$	762	$	485

    

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, 2023 and 2022 were as follows:

	Assets (Liabilities)
	2023		2022
	(in millions)
Net operating loss carryforward	$	84	$	105
Compensation and other accrued expense	218		158
Benefits payable	150		103
Deferred acquisition costs	43		43
Jobs tax credits	—		22
Other	16		16
Unearned revenues	5		7
Investment securities	419		454
Total deferred income tax assets	935		908
Valuation allowance	(73)		(57)
Total deferred income tax assets, net of valuation allowance	862		851
Depreciable property and intangible assets	(642)		(740)
Prepaid expenses	(156)		(132)
Other	(16)		(6)
Total deferred income tax liabilities	(814)		(878)
Total net deferred income tax assets (liabilities)	$	48	$	(27)

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, 2023 and 2022, respectively.

At December 31, 2023, we had approximately $7 million of federal net operating losses and approximately $1.2 billion of pre-apportioned state and 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 2024 through 2041. The 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 $73 million was established. 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 recover these deferred tax assets.

We file income tax returns in the United States and Puerto Rico. The U.S. Internal Revenue Service, or IRS, has completed its examinations of our consolidated income tax returns for 2021 and prior years. Our 2022 tax return is in the post-filing review period under the Compliance Assurance Process, or CAP. Our 2023 tax return is under advance review by the IRS under CAP. 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 2020. 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.