The acquisition of Centers Plan for Healthy Living LLC and Centers for Specialty Care Group IPA, LLC and CareBridge align with the company's strategic plan to grow the Health Benefits segment and leverage expertise while serving Medicaid and dual-eligible populations.

The sale of the life and disability businesses to StanCorp Financial Group, Inc. was completed on April 1, 2024, resulting in a gain on sale of business of $201 million. This aligns with the company's strategy to rationalize its portfolio.

The company anticipates growth in Public Exchange membership as former Medicaid members seek alternative coverage and is entering select service areas in Florida, Maryland, and Texas in 2025, using its Simply Healthcare and Wellpoint brands.

During the third quarter of 2023, management implemented the '2023-2024 Business Efficiency Program' to refine the focus of investments and optimize the physical footprint, including write-offs of IT assets, staff reductions, and asset impairments.

53% of Medicare Advantage members were in plans rated at least 4.0 Stars for 2024, but the 2025 Star Ratings reflect a decrease to 38%, which is expected to negatively impact 2026 operating revenue by approximately $183 million.

Management expects to mitigate the financial impact to 2026 operating gain and net income per share through various strategies such as contract diversification, operating expense efficiencies, capital deployment alternatives and network enhancements.

The company's profitability depends on accurately predicting and pricing for healthcare costs, which are affected by various factors including changes in healthcare practices, demographic characteristics, and new technologies.

The company acknowledges that its facilities and systems, and those of its third-party service providers, are regularly the target of cyber-attacks and security breaches, which could result in unauthorized disclosure of sensitive information and disruption of operations.

The company's contracts with federal and state agencies are subject to various risks, including payment rates determined by the government, compliance with contract requirements, and regulatory oversight, which could adversely affect the company's business.

The managed care industry is highly competitive, both nationally and in local markets, due to aggressive marketing, pricing, bid activity for government-sponsored programs, business consolidations, and technological advancements.

The company believes its exclusive right to market products under the BCBS brand in its most significant markets provides it with greater brand recognition over competitive product offerings.

The company competes with other health benefits plans for the best contracts with hospitals, physicians, and other providers to build its provider networks, which are a key competitive factor.

The company implemented a Business Efficiency Program to refine the focus of investments and optimize the physical footprint, including write-offs of IT assets, staff reductions, and asset impairments.

The company's results of operations depend in large part on its ability to accurately predict and effectively manage healthcare costs through medical management and health and wellness programs.

Carelon Services promotes affordability by managing complex areas of the healthcare system, leveraging data and insights to improve how members receive safe, appropriate, high-quality care and providers are reimbursed accurately and timely.

The company continues to enhance interactions with customers, providers, brokers, agents, employees, and other stakeholders through digital technology and improvements to internal operations.

The company continues to explore further innovation using AI, but there are risks associated with the development and deployment of AI, and there can be no assurance that the company's usage of AI will enhance its operations.

Failure to effectively maintain and modernize the company's information systems could have a material adverse effect on the company's business, cash flows, financial condition, and results of operations.

The Board of Directors has authorized a common stock repurchase program since 2003, and the most recent authorized increase to the program was $8,000 million on October 15, 2024.

On January 22, 2025, the Audit Committee declared a quarterly cash dividend to shareholders of $1.71 per share on the outstanding shares of common stock.

The company completed acquisitions of Centers Plan for Healthy Living LLC and CareBridge, aligning with strategic plans and demonstrating investment in growth opportunities.

The Compensation and Talent Committee of the Board of Directors regularly reviews and discusses management's approach to talent acquisition and retention, and monitors programs and practices related to workforce inclusion.

The Governance Committee of the Board has primary responsibility for monitoring the company's corporate social responsibility and environmental sustainability initiatives and performance.

The company is committed to ensuring that all people, regardless of age, race or ethnicity, sexual orientation, gender identity, disability, and geographic or financial access can receive individualized care.

The Consolidated Appropriations Act of 2023 decoupled Medicaid eligibility redetermination from the COVID-19 Public Health Emergency, leading to a decline in Medicaid membership.

The Inflation Reduction Act of 2022 contains a variety of provisions that have impacted, and continue to impact, our business including extending the American Rescue Plan Act of 2021's enhanced Premium Tax Credits.

Since its enactment in 2010, the ACA has introduced new risks, regulatory challenges and uncertainties, has impacted our business model and strategy and has required changes in the way our products are designed, underwritten, priced, distributed and administered.