Company: CI
Filing Date: 2025-07-31
Form Type: 10-Q
Source: 0001739940-25-000028
Chunk: 89

Company: Cigna Group
Filing Date: 2025-07-31
Form: 10-Q
Item: Part I, Item 1
Chunk 89
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-strategic businesses. We expect substantially all of the accrued liability to be paid by the end of 2025. See Note 17 to the Consolidated Financial Statements for further details of the Strategic Optimization Program impact by segment.

25

The following table summarizes a roll forward of the accrued liability recorded in Accrued expenses and other liabilities during the six months ended June 30, 2025:(In millions)Balance, December 31, 2024$— 2025 charges194 2025 payments(78)Balance, June 30, 2025$116 

Note 15 – Income Taxes

Income Tax ExpenseThe 19.2% effective tax rate for the three months ended June 30, 2025 was higher than the 18.1% rate for the three months ended June 30, 2024. The increase was primarily driven by the absence of tax benefits recorded in 2024 related to the release of tax reserves following favorable state audit resolutions, partially offset by the favorable impact of foreign operations. The 17.1% effective tax rate for the six months ended June 30, 2025 was lower than 31.5% rate for the six months ended June 30, 2024. The decrease was primarily due to the absence of a valuation allowance related to the impairment of equity securities in 2024, partially offset by the absence of tax benefits recorded in 2024 related to the release of tax reserves following favorable state audit resolutions and the impact related to the HCSC transaction.

As of June 30, 2025, we had approximately $847 million in deferred tax assets ("DTAs") associated with the impairment of equity securities as well as unrealized investment losses. A valuation allowance of $636 million, of which $422 million was established in the six months ended June 30, 2024, drove the higher effective tax rate and was almost entirely related to the impairment of equity securities discussed in Note 11 to the Consolidated Financial Statements. We have determined that a valuation allowance against the remaining DTAs is not currently required based on the Company's loss carryback capacity and ability and intent to hold certain securities until recovery. We continue to monitor and evaluate the need for any additional valuation allowance.

Note 16 – Contingencies and Other MattersThe Company, through its subsidiaries, is contingently liable for various guarantees provided in the ordinary course of business.A.Financial Guarantees: Retiree and Life Insurance BenefitsThe Company guarantees