Company: HUM
Filing Date: 2025-02-20
Form Type: 10-K
Source: 0000049071-25-000007
Chunk: 9

Company: HUMANA INC
Filing Date: 2025-02-20
Form: 10-K
Item: Item 8
Chunk 9
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 preparation of financial statements in accordance with accounting principles generally accepted in the United States of America requires us to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. The areas involving the most significant use of estimates are the estimation of benefits payable, the impact of risk adjustment provisions related to our Medicare contracts, the valuation and related impairment recognition of investment securities, and the valuation and related impairment recognition of long-lived assets, including goodwill and indefinite-lived intangible assets. These estimates are based on knowledge of current events and anticipated future events, and accordingly, actual results may ultimately differ materially from those estimates.Employer Group Commercial Medical Products Business ExitIn February 2023, we announced our planned exit from the Employer Group Commercial Medical Products business, which includes all fully insured, self-funded and Federal Employee Health Benefit medical plans, as well as associated wellness and rewards programs. No other Humana health plan offerings are materially affected. Following a strategic review, we determined the Employer Group Commercial Medical Products business was no longer positioned to sustainably meet the needs of commercial members over the long term or support our long-term strategic plans. We anticipate the exit of this line of business to be finalized in the first half of 2025.Value Creation Initiatives and Impairment Charges In order to create capacity to fund growth and investment in our Medicare Advantage business and further expansion of our healthcare services capabilities beginning in 2022, we committed to drive additional value for the enterprise through cost saving, productivity initiatives, and value acceleration from previous investments. As a result of these initiatives, we recorded charges of $281 million, $436 million and $473 million in 2024, 2023 and 2022, respectively, primarily within operating costs in the consolidated statements of income. 

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Humana Inc.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

The value creation initiative charges primarily relate to $256 million, $237 million and $248 million in asset impairments in 2024, 2023 and 2022, respectively, as well as $25 million, $199 million and $116 million in severance charges in connection with workforce optimization in 2024, 2023 and 2022, respectively. The remainder of the 2022 charges primarily relate to external consulting fees. In addition, we recorded impairment charges of $200 million, relating to indefinite-lived intangible assets, in 2024 and $91 million, including $55 million