Company: CI
Filing Date: 2025-05-02
Form Type: 10-Q
Source: 0001739940-25-000021
Chunk: 115

Company: Cigna Group
Filing Date: 2025-05-02
Form: 10-Q
Item: Part II, Item 3
Chunk 115
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 Advantage and Related Businesses" section below and Note 5 to the Consolidated Financial Statements for further discussion of the HCSC transaction.

Investment results primarily reflect the absence of the impairment of VillageMD equity securities that was recorded in 2024.

The effective tax rate decreased, primarily driven by the absence of a valuation allowance related to the impairment of equity securities recorded in 2024 (-540%), partially offset by the absence of state tax benefits recorded in 2024 (+88%) and the impact related to the HCSC transaction (+69%). See Note 15 to the Consolidated Financial Statements for further discussion of these matters.

Developments

Divestiture of Medicare Advantage and Related Businesses

On March 19, 2025, the Company completed the sale of our Medicare Advantage, Medicare Individual Stand-Alone Prescription Drug Plans, Medicare and Other Supplemental Benefits, and CareAllies businesses within the U.S. Healthcare operating segment to Health Care Service Corporation ("HCSC," and such transaction, the "HCSC transaction"). The purchase price increased from $3.3 billion to $4.8 billion, subject to post-closing contractual adjustments, reflecting higher statutory surplus for the legal entities when conveyed to HCSC. The Company received $4.2 billion cash proceeds at closing. We expect receipt of the remaining $0.6 billion in the fourth quarter of 2025 upon HCSC's collection of amounts due from the Centers for Medicare and Medicaid Services ("CMS"). See Note 5 to the Consolidated Financial Statements for further information. 

LIQUIDITY AND CAPITAL RESOURCES

Liquidity

We maintain liquidity at two levels: the subsidiary level and the parent company level.

Subsidiary Level. Cash requirements at the subsidiary level generally consist of pharmacy, medical costs and other benefit payments; expense requirements, primarily for employee compensation and benefits, information technology and facilities costs; income taxes; and debt service. 

Our subsidiaries normally meet their liquidity requirements by maintaining appropriate levels of cash, cash equivalents and short-term investments; using cash flows from operating activities; matching durations of investments to estimated durations for the related insurance and contractholder liabilities; selling investments; and borrowing from affiliates, subject to applicable regulatory limits.

Parent Level. Cash requirements at the parent company level generally consist of debt service; payment of declared dividends to shareholders; lending to subsidiaries as needed; and pension plan funding.

The parent company normally meets its liquidity requirements by maintaining appropriate levels of cash and various types of marketable investments; collecting dividends from its subsidiaries; using proceeds from issuing debt