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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
________________________________________________________ 
Form 10-K
__________________________________________________________ 

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2019
or
 
 
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 
 
For the transition period from _____ to _____

Commission file number: 1-10864
__________________________________________________________ 
UHGLOGO2019A01.JPG
UnitedHealth Group Incorporated
(Exact name of registrant as specified in its charter)
 
Delaware
 
41-1321939
(State or other jurisdiction of
incorporation or organization)
 
(I.R.S. Employer
Identification No.)
 
 
 
 
UnitedHealth Group Center
 
55343
9900 Bren Road East
 
Minnetonka,
Minnesota
 
(Address of principal executive offices)
 
(Zip Code)
(952) 936-1300
(Registrant’s telephone number, including area code)
______________________________________________________  
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
 
Trading Symbol(s)
 
Name of each exchange on which registered
Common Stock, $.01 par value
 
UNH
 
New York Stock Exchange
Securities registered pursuant to Section 12(g) of the Act: None
__________________________________________________________  
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.   Yes No
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.     Yes No
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes No
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes  No
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one)
Large Accelerated Filer
 
Accelerated filer
 
Non-accelerated filer
Smaller reporting company
 
 
 
 
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).    Yes  No 
The aggregate market value of voting stock held by non-affiliates of the registrant as of June 28, 2019 was $229,868,010,278 (based on the last reported sale price of $244.01 per share on June 28, 2019, on the New York Stock Exchange), excluding only shares of voting stock held beneficially by directors, executive officers and subsidiaries of the registrant.
As of January 31, 2020, there were 948,573,372 shares of the registrant’s Common Stock, $.01 par value per share, issued and outstanding.
DOCUMENTS INCORPORATED BY REFERENCE
The information required by Part III of this report, to the extent not set forth herein, is incorporated by reference from the registrant’s definitive proxy statement relating to its 2020 Annual Meeting of Shareholders. Such proxy statement will be filed with the Securities and Exchange Commission within 120 days after the end of the fiscal year to which this report relates.
 
 
 
 
 




UNITEDHEALTH GROUP
Table of Contents
 
 
 
Page
 
 
 
Part I
Item 1.
1
Item 1A.
12
Item 1B.
22
Item 2.
22
Item 3.
22
Item 4.
22
Part II
Item 5.
22
Item 6.
24
Item 7.
24
Item 7A.
35
Item 8.
36
Item 9.
67
Item 9A.
67
Item 9B.
70
Part III
Item 10.
70
Item 11.
70
Item 12.
71
Item 13.
71
Item 14.
71
Part IV
Item 15.
72
Item 16.
80
81









PART I
ITEM  1.
BUSINESS
INTRODUCTION
Overview
UnitedHealth Group is a diversified health care company dedicated to helping people live healthier lives and helping make the health system work better for everyone. The terms “we,” “our,” “us,” “its,” “UnitedHealth Group,” or the “Company” used in this report refer to UnitedHealth Group Incorporated and its subsidiaries.
Through our diversified family of businesses, we leverage core competencies in data and health information, advanced technology, and clinical expertise, focused on improving health outcomes, lowering health care costs and creating a better experience for patients, their caregivers and physicians. These core competencies are deployed within our two distinct, but strategically aligned, business platforms: health benefits operating under UnitedHealthcare and health services operating under Optum.
UnitedHealthcare provides health care benefits to an array of customers and markets. UnitedHealthcare Employer & Individual serves employers ranging from sole proprietorships to large, multi-site and national employers, public sector employers and individual consumers. UnitedHealthcare Medicare & Retirement delivers health and well-being benefits for Medicare beneficiaries and retirees. UnitedHealthcare Community & State manages health care benefit programs on behalf of state Medicaid and community programs and their participants. UnitedHealthcare Global provides health and dental benefits and hospital and clinical services to employer groups and individuals in South America, and other diversified global health businesses.
Optum is a health services business serving the broad health care marketplace, including payers, care providers, employers, governments, life sciences companies and consumers, through its OptumHealth, OptumInsight and OptumRx businesses. These businesses have dedicated units that help improve overall health system performance through optimizing care quality, reducing costs and improving consumer experience and care provider performance, leveraging distinctive capabilities in data and analytics, pharmacy care services, population health, health care delivery and health care operations.
Through UnitedHealthcare and Optum, in 2019, we processed nearly a trillion dollars in gross billed charges and we managed more than $250 billion in aggregate health care spending on behalf of the customers and consumers we serve. Our revenues are derived from premiums on risk-based products; fees from management, administrative, technology, consulting and managed outsourced services; sales of a wide variety of products and services related to the broad health care industry; and investment and other income. Our two business platforms have four reportable segments:
UnitedHealthcare, which includes UnitedHealthcare Employer & Individual, UnitedHealthcare Medicare & Retirement, UnitedHealthcare Community & State and UnitedHealthcare Global;
OptumHealth;
OptumInsight; and
OptumRx.
UnitedHealthcare
Through its health benefits offerings, UnitedHealthcare is enabling better health, helping to control rising health care costs and creating a better health care experience for its customers. UnitedHealthcare’s market position is built on:
strong local-market relationships;
the breadth of product offerings, based upon extensive expertise in distinct market segments in health care;
service and advanced technology, including digital consumer engagement;
competitive medical and operating cost positions;
effective clinical engagement; and
innovation for customers and consumers.
UnitedHealthcare utilizes Optum’s capabilities to help coordinate and provide patient care, improve affordability of medical care, analyze cost trends, manage pharmacy benefits, work with care providers more effectively and create a simpler and more satisfying consumer experience.
In the United States, UnitedHealthcare arranges for discounted access to care through networks that include 1.4 million physicians and other health care professionals and more than 6,500 hospitals and other facilities.

1



UnitedHealthcare is subject to extensive government regulation. See further discussion of our regulatory environment below under “Government Regulation” and in Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”
UnitedHealthcare Employer & Individual
UnitedHealthcare Employer & Individual offers a comprehensive array of consumer-oriented health benefit plans and services nationwide for large national employers, public sector employers, mid-sized employers, small businesses, and individual consumers. UnitedHealthcare Employer & Individual provides access to medical services for 27.8 million people on behalf of our customers and alliance partners, including employer customers, serving people across all 50 states, the District of Columbia and most U.S. territories. Products are offered through affiliates that are licensed as insurance companies, health maintenance organizations (HMOs), or third-party administrators (TPAs). Large employer groups typically use self-funded arrangements where UnitedHealthcare Employer & Individual earns a service fee. Smaller employer groups and individuals are more likely to purchase risk-based products because they are less willing or unable to bear a greater potential liability for health care expenditures.
Through its risk-based product offerings, UnitedHealthcare Employer & Individual assumes the risk of both medical and administrative costs for its customers in return for a monthly premium, which is typically a fixed rate per individual served for a one-year period. When providing administrative and other management services to customers that elect to self-fund the health care costs of their employees and employees’ dependents, UnitedHealthcare Employer & Individual receives a fixed monthly service fee per individual served. These customers retain the risk of financing medical benefits for their employees and employees’ dependents, while UnitedHealthcare Employer & Individual provides services such as coordination and facilitation of medical and related services to customers, consumers and health care professionals, administration of transaction processing and access to a contracted network of physicians, hospitals and other health care professionals, including dental and vision.
The consolidated purchasing capacity represented by the individuals served by UnitedHealth Group makes it possible for UnitedHealthcare Employer & Individual to contract for cost-effective access to a large number of conveniently located care professionals and facilities. UnitedHealthcare Employer & Individual has relationships with network care providers that integrate data and analytics, implement value-based payments and care management programs and enable us to jointly better manage health care and improve quality across populations.
UnitedHealthcare Employer & Individual typically distributes its products through consultants or direct sales in the larger employer and public sector segments. In the smaller group segment of the commercial marketplace, UnitedHealthcare Employer & Individual’s distribution system consists primarily of direct sales and sales through collaboration with brokers and agents. UnitedHealthcare Employer & Individual also distributes products through wholesale agents or agencies that contract with health insurance carriers to distribute individual or group benefits and provide other related services to their customers. In addition, UnitedHealthcare Employer & Individual distributes its products through professional employer organizations, associations and through both multi-carrier and its own proprietary private exchange marketplaces.
UnitedHealthcare Employer & Individual’s diverse product portfolio offers employers a continuum of benefit designs, price points and approaches to consumer engagement, which provides the flexibility to meet a full spectrum of their coverage needs.
UnitedHealthcare Employer & Individual’s major product families include:
Traditional Products. Traditional products include a full range of medical benefits and network options, and offer a spectrum of covered services, including preventive care, direct access to specialists and catastrophic protection.
Consumer Engagement Products. Consumer engagement products couple plan design with financial accounts to increase individuals’ responsibility for their health and well-being. This suite of products includes high-deductible consumer-driven benefit plans, which include health reimbursement accounts (HRAs), health savings accounts (HSAs) and consumer engagement services such as personalized behavioral incentive programs, consumer education and other digital offerings. We also offer and have been developing a variety of innovative consumer-centric products that align to the unique needs and financial means of our customers, while engaging individuals in better managing their health.
Clinical and Pharmacy Products. UnitedHealthcare Employer & Individual offers a comprehensive suite of clinical and pharmacy care services products, which complement its service offerings by improving quality of care, engaging consumers and providing cost-saving options. Consumers served by UnitedHealthcare Employer & Individual can access clinical products that help them make better health care decisions and better use of their medical benefits, which contribute to improved health and lowered medical expenses.
UnitedHealthcare Employer & Individual’s comprehensive and integrated pharmacy care services promote lower costs by using formulary programs to produce better unit costs, encouraging consumers to use drugs that offer improved value and outcomes, helping consumers take actions to improve their health and supporting the appropriate use of drugs based on clinical evidence through physician and consumer education programs.

2



Each medical plan has a core set of clinical programs embedded in the offering, with additional services available depending on offering type (risk-based or self-funded), line of business (e.g., small business, key accounts, public sector, national accounts or individual consumers) and clinical need. UnitedHealthcare Employer & Individual’s clinical programs include:
wellness programs;
decision support;
utilization management;
case and disease management;
complex condition management;
on-site programs, including biometrics and flu shots;
incentives to reinforce positive behavior change;
mental health/substance use disorder management; and
employee assistance programs.
Specialty Offerings. Through its broad network, UnitedHealthcare Employer & Individual delivers dental, vision, hearing, life, transportation, critical illness, specified disease/sickness, accident and short-term disability product offerings using an integrated approach in private and retail settings.
UnitedHealthcare Medicare & Retirement
UnitedHealthcare Medicare & Retirement provides health and well-being services to individuals age 50 and older, addressing their unique needs for preventive and acute health care services, as well as services dealing with chronic disease and other specialized issues common among older people. UnitedHealthcare Medicare & Retirement is fully dedicated to serving this growing senior market segment, providing products and services in all 50 states, the District of Columbia and most U.S. territories. UnitedHealthcare Medicare & Retirement has distinct pricing, underwriting, clinical program management and marketing capabilities dedicated to health products and services in this market.
UnitedHealthcare Medicare & Retirement offers a selection of products that allow people choice in obtaining the health coverage and services they need as their circumstances change. UnitedHealthcare Medicare & Retirement is positioned to serve seniors who find that affordable, network-based care provided through Medicare Advantage plans meets their unique health care needs. For those who prefer traditional fee-for-service Medicare, UnitedHealthcare Medicare & Retirement offers both Medicare Supplement and Medicare Prescription Drug Benefit (Medicare Part D) programs that supplement their government-sponsored Medicare by providing additional benefits and coverage options. UnitedHealthcare Medicare & Retirement services include care management and health system navigator services, clinical management programs, nurse health line services, 24-hour access to health care information, access to discounted health services from a network of care providers and administrative services.
UnitedHealthcare Medicare & Retirement has extensive distribution capabilities and experience, including direct marketing to consumers on behalf of its key clients, including AARP, the nation’s largest membership organization dedicated to the needs of people age 50 and over, and state and U.S. government agencies. Products are also offered through agents, employer groups and digital channels.
UnitedHealthcare Medicare & Retirement’s major product categories include:
Medicare Advantage. UnitedHealthcare Medicare & Retirement provides health care coverage for seniors and other eligible Medicare beneficiaries primarily through the Medicare Advantage program administered by the Centers for Medicare & Medicaid Services (CMS), including Medicare Advantage HMO plans, preferred provider organization (PPO) plans, Point-of-Service plans, Private-Fee-for-Service plans and Special Needs Plans (SNPs). Under the Medicare Advantage program, UnitedHealthcare Medicare & Retirement provides health insurance coverage in exchange for a fixed monthly premium per member from CMS plus, in some cases, monthly consumer premiums. Premium amounts received from CMS vary based on the geographic areas in which individuals reside; demographic factors such as age, gender and institutionalized status; and the health status of the individual. Medicare Advantage plans are designed to compete at the local level, taking into account consumer and care provider preferences, competitor offerings, our quality and cost initiatives, our historical financial results and the long-term payment rate outlook for each geographic area. UnitedHealthcare Medicare & Retirement served 5.3 million people through its Medicare Advantage products as of December 31, 2019.
Built on more than 20 years of experience, UnitedHealthcare Medicare & Retirement’s senior-focused care management model operates at a medical cost level below that of traditional Medicare, while helping seniors live healthier lives. Through our HouseCalls program, nurse practitioners performed 1.7 million in-home preventive care visits in 2019 to address unmet care

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opportunities and close gaps in care. Our Navigate4Me program provides a single point of contact and a direct line of support for individuals as they go through their health care experiences. For high-risk patients in certain care settings and programs, UnitedHealthcare Medicare & Retirement uses proprietary, automated medical record software and digital therapeutics for remote monitoring that enables clinical care teams to capture and track patient data and clinical encounters, creating a comprehensive set of care information that bridges across home, hospital and nursing home care settings. Proprietary predictive modeling tools help identify people at high risk and enable care managers to create individualized care plans that help them obtain the right care, in the right place, at the right time.
Medicare Part D. UnitedHealthcare Medicare & Retirement provides Medicare Part D benefits to beneficiaries throughout the United States and its territories through its Medicare Advantage and stand-alone Medicare Part D plans. The stand-alone Medicare Part D plans address a large spectrum of people’s needs and preferences for their prescription drug coverage, including low-cost prescription options. Each of the plans includes the majority of the drugs covered by Medicare and provides varying levels of coverage to meet the diverse needs of Medicare beneficiaries. As of December 31, 2019, UnitedHealthcare enrolled 9.0 million people in the Medicare Part D programs, including 4.4 million individuals in the stand-alone Medicare Part D plans, with the remainder in Medicare Advantage plans incorporating Medicare Part D coverage.
Medicare Supplement. UnitedHealthcare Medicare & Retirement is currently serving 4.8 million seniors nationwide through various Medicare Supplement products in association with AARP. UnitedHealthcare Medicare & Retirement offers a full range of supplemental products at a diversity of price points. These products cover various levels of coinsurance and deductible gaps that seniors are exposed to in the traditional Medicare program.
Premium revenues from CMS represented 33% of UnitedHealth Group’s total consolidated revenues for the year ended December 31, 2019, most of which were generated by UnitedHealthcare Medicare & Retirement.
UnitedHealthcare Community & State
UnitedHealthcare Community & State is dedicated to serving state programs that care for the economically disadvantaged, the medically underserved and those without the benefit of employer-funded health care coverage, typically in exchange for a monthly premium per member from the state program. UnitedHealthcare Community & State’s primary customers oversee Medicaid plans, including Temporary Assistance to Needy Families (TANF), Children’s Health Insurance Programs (CHIP), Dual SNPs (DSNPs), Long-Term Services and Supports (LTSS), Aged, Blind and Disabled and other federal, state and community health care programs. As of December 31, 2019, UnitedHealthcare Community & State participated in programs in 31 states and the District of Columbia, and served 5.9 million people; including nearly 1 million people through Medicaid expansion programs in 15 states under the Patient Protection and Affordable Care Act (ACA).
States using managed care services for Medicaid beneficiaries select health plans by using a formal bid process or by awarding individual contracts. A number of factors are considered by UnitedHealthcare Community & State when choosing programs for participation, including the state’s commitment and consistency of support for its Medicaid managed care program in terms of service, innovation and funding; the eligible population base, both immediate and long term; and the structure of the projected program. UnitedHealthcare Community & State works with its state customers to advocate for actuarially sound rates, commensurate with medical cost trends.
These health plans and care programs are designed to address the complex needs of the populations they serve, including the chronically ill, people with disabilities and people with a higher risk of medical, behavioral and social conditions. UnitedHealthcare Community & State administers benefits for the unique needs of children, pregnant women, adults, seniors and those who are institutionalized or are nursing home eligible. These individuals often live in areas that are medically underserved and are less likely to have a consistent relationship with the medical community or a care provider. They also often face significant social and economic challenges.
UnitedHealthcare Community & State leverages the national capabilities of UnitedHealth Group locally, supporting effective care management, strong regulatory partnerships, greater administrative efficiency, improved clinical outcomes and the ability to adapt to a changing national and local market environment. UnitedHealthcare Community & State coordinates resources among family, physicians, other health care providers, and government and community-based agencies and organizations to facilitate continuous and effective care and often addresses other social determinants that can affect people’s health status and health system usage.
Approximately 75% of the people in state Medicaid programs are served by managed care, but this population represents only 50% of total Medicaid spending. UnitedHealthcare Community & State’s business development opportunities include entering fee-for-service markets converting to managed care; and growing in existing managed care markets, including state expansions to populations with more complex needs requiring more sophisticated models of care, including DSNP and LTSS programs. This expansion includes integrated care management of physical, behavioral, long-term care services and supports, and social services by applying strong data analytics and community-based collaboration.

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UnitedHealthcare Community & State continues to evolve its clinical model to enhance quality and the clinical experience for the people it serves. The model enables UnitedHealthcare Community & State to quickly identify the people who could benefit most from more highly coordinated care; typically, the 5% who are most at risk drive over 50% of states’ medical costs.
UnitedHealthcare Global
UnitedHealthcare Global serves nearly 8 million people with medical and dental benefits, residing principally in Brazil, Chile, Colombia and Peru, but also in more than 140 other countries. UnitedHealthcare Global serves multinational and local businesses, governments, insurers and individuals and their families through health insurance plans for local populations, care delivery services, benefit plans and risk and assistance solutions. UnitedHealthcare Global offers health care delivery in these markets through more than 300 hospitals, outpatient and ambulatory clinics and surgery centers to UnitedHealthcare Global members and consumers served by the external payer market.
In Brazil, Amil provides health benefits to 3.6 million people and dental benefits to 2.2 million people. Empresas Banmédica provides health benefits and health care services to 2.1 million people in Chile, Colombia and Peru. Lusíadas Saúde provides clinical services to people in Portugal through an owned network of hospitals and outpatient clinics.
Optum
Optum is a technology-enabled health services business serving the broad health care marketplace, including:
Those who need care: the consumers who need the right support, information, resources and products to achieve their health goals.
Those who provide care: pharmacies, hospitals, physicians, practices and other health care facilities seeking to modernize the health system and support the best possible patient care and experiences.
Those who pay for care: employers, health plans, and state, federal and municipal agencies devoted to ensuring the populations they sponsor receive high-quality care, administered and delivered efficiently and effectively.
Those who innovate for care: global life sciences organizations dedicated to developing more effective approaches to care, enabling technologies and medicines that improve care delivery and health outcomes.
Optum operates three business segments leveraging distinctive capabilities in data and analytics, pharmacy care services, population health, health care delivery and health care operations:
OptumHealth focuses on care delivery, care management, wellness and consumer engagement, and health financial services;
OptumInsight offers data, analytics, research, consulting, technology and managed services solutions; and
OptumRx provides a diversified array of pharmacy care services.
OptumHealth
OptumHealth is a diversified health and wellness business serving the physical, emotional and health-related financial needs of 96 million unique individuals. OptumHealth enables population health through programs offered by employers, payers, government entities and directly with the care delivery system. OptumHealth products and services deliver value by improving quality and patient satisfaction while lowering cost. OptumHealth builds high-performing networks and centers of excellence across the care continuum, by working directly with physicians to advance population health and by coordinating care for the most medically complex patients.
OptumHealth serves patients and care providers through its local ambulatory care services business and delivers care through a physician-led, patient-centric and data-driven organization comprised of nearly 50,000 employed, managed or contracted physicians, helping improve care quality, affordability and patient experience. OptumHealth also enables care providers’ transition from traditional, fee-for-service care delivery to performance-based delivery and payment models that improve the focus on patient health and outcomes, such as those emerging through accountable care organizations (ACOs) and local care provider partnerships. Through strategic partnerships, alliances and ownership arrangements, OptumHealth helps care providers adopt new approaches and technologies that improve the coordination of care across all providers involved in patient care to more comprehensively serve patients. Surgical Care Affiliates’ independent ambulatory surgical centers and surgical hospitals provide high-value surgical services at a substantially lower cost than a traditional in-patient hospital setting and MedExpress’ neighborhood care centers provide urgent and walk-in care services with a consumer-friendly approach.
OptumServe provides a wide range of health services specifically tailored to active military and veterans and the agencies that support them.
OptumHealth serves people through population health services that meet both the preventive care and health intervention needs of consumers across the care continuum, encompassing physical health and wellness, mental health, complex medical

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conditions, disease management, hospitalization and post-acute care. This includes offering access to proprietary networks of provider specialists, including behavioral health, organ transplant, chiropractic and physical therapy. OptumHealth engages consumers in managing their health through guidance, digital tools and programs that help them achieve their health goals and maintain healthy lifestyles.
Optum Financial Services, through Optum Bank, a wholly-owned subsidiary, serves consumers through 5.6 million health savings and other accounts and has nearly $12 billion in assets under management as of December 31, 2019. During 2019, Optum Bank processed $170 billion in digital medical payments to physicians and other health care providers. Organizations across the health system rely on Optum to manage and improve payment flows through its highly automated, scalable, digital payment systems.
OptumHealth offers its products on a risk basis, where it assumes responsibility for health care costs in exchange for a monthly premium per individual served, on an administrative fee basis, under which it manages or administers delivery of the products or services in exchange for a fixed monthly fee per individual served, or on a fee-for-service basis, where it delivers medical services to patients in exchange for a contracted fee. For its financial services offerings, OptumHealth charges fees and earns investment income on managed funds.
OptumHealth sells its products primarily through its direct sales force, strategic collaborations and external producers in three markets: employers (which includes the sub-markets of large, mid-sized and small employers), payers (which includes the sub-markets of health plans, TPAs, underwriter/stop-loss carriers and individual market intermediaries) and government entities (which includes states, CMS, the Department of Defense, the Veterans Administration and other federal procurement agencies).
OptumInsight
OptumInsight provides services, technology and health care expertise to major participants in the health care industry. OptumInsight’s capabilities are focused on technology, research and consulting and managed services that help improve the quality of care and drive greater efficiency in the health care system. Technology includes population health and risk analytics, administrative and clinical technology for claims editing, risk adjustment and payment integrity, health information and electronic data exchange and technology strategy and management. Research and consulting helps organizations reduce administrative costs and implement best practices to improve clinical performance. Managed services provides solutions such as revenue cycle management, risk analytics, payment integrity outsourcing and state Medicaid data and technology management. Hospital systems, physicians, health plans, governments, life sciences companies and other organizations that comprise the health care industry depend on OptumInsight to help them improve performance, achieve efficiency, reduce costs, advance quality, meet compliance mandates and modernize their core operating systems to meet the changing needs of the health system.
Many of OptumInsight’s software and information products and professional services are delivered over extended periods, often several years. OptumInsight maintains an order backlog to track unearned revenues under these long-term arrangements. The backlog consists of estimated revenue from signed contracts, other legally binding agreements and anticipated contract renewals based on historical experience with OptumInsight’s customers. OptumInsight’s aggregate backlog as of December 31, 2019 was $19.3 billion, of which $9.9 billion is expected to be realized within the next 12 months. The aggregate backlog includes $7.1 billion related to affiliated agreements. OptumInsight’s aggregate backlog as of December 31, 2018, was $17.0 billion. OptumInsight cannot provide any assurance that it will be able to realize all of the revenues included in the backlog due to uncertainties with regard to the timing and scope of services and the potential for cancellation, non-renewal or early termination of service arrangements.
OptumInsight’s products and services are sold primarily through a direct sales force. OptumInsight’s products are also supported and distributed through an array of alliances and business partnerships with other technology vendors, who integrate and interface OptumInsight’s products with their applications.
OptumInsight believes it is well positioned to address the needs of four primary market segments: care providers (e.g., physicians and hospital systems), health plans, governments and life sciences companies.
Care Providers. Serving nine out of ten U.S. hospitals and more than 100,000 physicians, OptumInsight assists care providers in meeting their challenge to improve patient outcomes and care amid changing payment models and pressures. OptumInsight brings a broad array of solutions to help care providers meet these challenges, with particular focus on clinical performance and quality improvement, population health, data management and analytics, revenue management, cost containment, compliance, cloud-enabled collaboration and consumer engagement.
Health Plans. OptumInsight serves four out of five U.S. health plans through cost-effective, technology-enabled solutions that help them improve efficiency, understand and optimize growth while managing risk, improve payment integrity performance, deliver on clinical initiatives and compliance goals, and build and manage strong networks of care.

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Governments. OptumInsight provides services tailored to government payers, including data and analytics technology, claims management and payment accuracy services, and strategic consulting.
Life Sciences. OptumInsight provides services to global life sciences companies. These companies look to OptumInsight for data, analytics and expertise in core areas of health economics and outcomes research, market access consulting, integrated clinical and health care claims data and informatics services, epidemiology and drug safety, and patient reported outcomes.
OptumRx
OptumRx provides a full spectrum of pharmacy care services to 56 million people in the United States through its network of more than 67,000 retail pharmacies, multiple home delivery, specialty and community health pharmacies and through the provision of infusion services. OptumRx manages limited and ultra-limited distribution drugs in oncology, HIV, pain management and ophthalmology and serves the growing pharmacy needs of people with behavioral health and substance use disorders, particularly Medicare and Medicaid beneficiaries.
OptumRx’s comprehensive whole-person approach to pharmacy care services integrates demographic, medical, laboratory, pharmaceutical and other clinical data and applies analytics to drive clinical care insight to support care treatments and compliance, benefiting clients and individual consumers through enhanced services, elevated clinical quality and cost trend management.
In 2019, OptumRx managed $96 billion in pharmaceutical spending, including $40 billion in specialty pharmaceutical spending.
OptumRx provides pharmacy care services to a number of health plans, including a substantial majority of UnitedHealthcare members, large national employer plans, unions and trusts, purchasing coalitions and government entities. OptumRx’s distribution system consists primarily of health insurance brokers and other health care consultants and direct sales.
OptumRx offers multiple clinical programs, digital tools and services to help clients manage overall pharmacy and health care costs in a clinically appropriate manner, which are designed to promote better health outcomes, and to help target inappropriate utilization and non-adherence to medication, each of which may result in adverse medical events that affect member health and client pharmacy and medical spend. OptumRx provides various utilization management, medication management, quality assurance, adherence and counseling programs to complement the client’s plan design and clinical strategies. OptumRx offers a distinctive approach to integrating the management of medical and pharmaceutical care by using data and advanced analytics to help improve comprehensive decision-making, elevate quality, close gaps in care and reduce costs for customers and people served.
As of December 31, 2019, OptumRx operated seven home delivery pharmacies in the United States, which provide patients with access to maintenance medications and enables OptumRx to manage clients’ drug costs through operating efficiencies and economies of scale. As of December 31, 2019, OptumRx’s specialty pharmacy operations included nearly 70 specialty and infusion pharmacies located throughout the United States that are used for delivery of advanced medications to people with chronic or genetic diseases and disorders. OptumRx also operates more than 500 community mental health facility pharmacies, which help align benefits, care management and pharmacy services for those living with complex, chronic medical and behavioral health issues.
GOVERNMENT REGULATION
Our businesses are subject to comprehensive federal, state and international laws and regulations. We are regulated by federal, state and international regulatory agencies that generally have discretion to issue regulations and interpret and enforce laws and rules. The regulations can vary significantly from jurisdiction to jurisdiction and the interpretation of existing laws and rules also may change periodically. Domestic and international governments continue to enact and consider various legislative and regulatory proposals that could materially impact certain aspects of the health care system. New laws, regulations and rules, or changes in the interpretation of existing laws, regulations and rules, including as a result of changes in the political climate, could adversely affect our business.
If we fail to comply with, or fail to respond quickly and appropriately to changes in, applicable laws, regulations and rules, our business, results of operations, financial position and cash flows could be materially and adversely affected. See Part I, Item 1A, “Risk Factors” for a discussion of the risks related to our compliance with federal, state and international laws and regulations.

Federal Laws and Regulation
We are subject to various levels of U.S. federal regulation. For example, when we contract with the federal government, we are subject to federal laws and regulations relating to the award, administration and performance of U.S. government contracts.

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CMS regulates our UnitedHealthcare businesses and certain aspects of our Optum businesses. Payments by CMS to our businesses are subject to regulations, including those governing fee-for-service and the submission of information relating to the health status of enrollees for purposes of determining the amounts of certain payments to us. CMS also has the right to audit our performance to determine our compliance with CMS contracts and regulations and the quality of care we provide to Medicare beneficiaries. Our commercial business is further subject to CMS audits related to medical loss ratios (MLRs) and risk adjustment data.
UnitedHealthcare Community & State has Medicaid and CHIP contracts that are subject to federal regulations regarding services to be provided to Medicaid enrollees, payment for those services and other aspects of these programs. There are many regulations affecting Medicare and Medicaid compliance and the regulatory environment with respect to these programs is complex. In addition, our business is subject to laws and regulations relating to consumer protection, anti-fraud and abuse, anti-kickbacks, false claims, prohibited referrals, inappropriately reducing or limiting health care services, anti-money laundering, securities and antitrust compliance.
Privacy, Security and Data Standards Regulation. The administrative simplification provisions of the Health Insurance Portability and Accountability Act of 1996, as amended (HIPAA), apply to both the group and individual health insurance markets, including self-funded employee benefit plans. Federal regulations related to HIPAA contain minimum standards for electronic transactions and code sets and for the privacy and security of protected health information.
The Health Information Technology for Economic and Clinical Health Act (HITECH) regulates matters relating to privacy, security and data standards. HITECH imposes requirements on uses and disclosures of health information; included contracting requirements for HIPAA business associate agreements; extends parts of HIPAA privacy and security provisions to business associates; adds federal data breach notification requirements for covered entities and business associates and reporting requirements to the U.S. Department of Health and Human Services (HHS) and the Federal Trade Commission (FTC) and, in some cases, to the local media; strengthens enforcement and imposes higher financial penalties for HIPAA violations and, in certain cases, imposes criminal penalties for individuals, including employees. In the conduct of our business, depending on the circumstances, we may act as either a covered entity or a business associate.
The use and disclosure of individually identifiable health data by our businesses is also regulated in some instances by other federal laws, including the Gramm-Leach-Bliley Act (GLBA) or state statutes implementing GLBA. These federal laws and state statutes generally require insurers to provide customers with notice regarding how their non-public personal health and financial information is used and the opportunity to “opt out” of certain disclosures before the insurer shares such information with a third party, and generally prescribe safeguards for the protection of personal information. Neither the GLBA nor HIPAA privacy regulations preempt more stringent state laws and regulations that may apply to us, as discussed below. Federal consumer protection laws may also apply in some instances to privacy and security practices related to personally identifiable information.
ERISA. The Employee Retirement Income Security Act of 1974, as amended (ERISA), regulates how our services are provided to or through certain types of employer-sponsored health benefit plans. ERISA is a set of laws and regulations that is subject to periodic interpretation by the U.S. Department of Labor (DOL) as well as the federal courts. ERISA sets forth standards on how our business units may do business with employers who sponsor employee health benefit plans, particularly those that maintain self-funded plans. Regulations established by the DOL subject us to additional requirements for administration of benefits, claims payment and member appeals under health care plans governed by ERISA.
State Laws and Regulation
Health Care Regulation. Our insurance and HMO subsidiaries must be licensed by the jurisdictions in which they conduct business. All of the states in which our subsidiaries offer insurance and HMO products regulate those products and operations. The states require periodic financial reports and establish minimum capital or restricted cash reserve requirements. The National Association of Insurance Commissioners (NAIC) has adopted model regulations that, where adopted by states, require expanded governance practices and risk and solvency assessment reporting. Most states have adopted these or similar measures to expand the scope of regulations relating to corporate governance and internal control activities of HMOs and insurance companies. We are required to maintain a risk management framework and file a confidential self-assessment report with state insurance regulators. We file reports annually with Connecticut, our lead regulator, and with New York, as required by that state’s regulation. Certain states have also adopted their own regulations for minimum MLRs with which health plans must comply. In addition, a number of state legislatures have enacted or are contemplating significant reforms of their health insurance markets, either independent of or to comply with or be eligible for grants or other incentives in connection with the ACA, which may affect our operations and our financial results.
Health plans and insurance companies are regulated under state insurance holding company regulations. Such regulations generally require registration with applicable state departments of insurance and the filing of reports that describe capital

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structure, ownership, financial condition, certain affiliated transactions and general business operations. Most state insurance holding company laws and regulations require prior regulatory approval of acquisitions and material affiliated transfers of assets, as well as transactions between the regulated companies and their parent holding companies or affiliates. These laws may restrict the ability of our regulated subsidiaries to pay dividends to our holding companies.
Some of our business activity is subject to other health care-related regulations and requirements, including PPO, Managed Care Organization (MCO), utilization review (UR), TPA, pharmacy care services, durable medical equipment or care provider-related regulations and licensure requirements. These regulations differ from state to state and may contain network, contracting, product and rate, licensing and financial and reporting requirements. There are laws and regulations that set specific standards for delivery of services, appeals, grievances and payment of claims, adequacy of health care professional networks, fraud prevention, protection of consumer health information, pricing and underwriting practices and covered benefits and services. State health care anti-fraud and abuse prohibitions encompass a wide range of activities, including kickbacks for referral of members, billing for unnecessary medical services and improper marketing. Certain of our businesses are subject to state general agent, broker and sales distribution laws and regulations. UnitedHealthcare Community & State and certain of our Optum businesses are subject to regulation by state Medicaid agencies that oversee the provision of benefits to our Medicaid and CHIP beneficiaries and to our dually eligible (for Medicare and Medicaid) beneficiaries. We also contract with state governmental entities and are subject to state laws and regulations relating to the award, administration and performance of state government contracts.
State Privacy and Security Regulations. A number of states have adopted laws and regulations that may affect our privacy and security practices, such as state laws that govern the use, disclosure and protection of social security numbers and protected health information or that are designed to implement GLBA or protect credit card account data. State and local authorities increasingly focus on the importance of protecting individuals from identity theft, with a significant number of states enacting laws requiring businesses to meet minimum cyber-security standards and notify individuals of security breaches involving personal information. State consumer protection laws may also apply to privacy and security practices related to personally identifiable information, including information related to consumers and care providers. Different approaches to state privacy and insurance regulation and varying enforcement philosophies in the different states may materially and adversely affect our ability to standardize our products and services across state lines. See Part I, Item 1A, “Risk Factors” for a discussion of the risks related to compliance with state privacy and security regulations.
Corporate Practice of Medicine and Fee-Splitting Laws. Certain of our businesses function as direct medical service providers and, as such, are subject to additional laws and regulations. Some states have corporate practice of medicine laws that prohibit specific types of entities from practicing medicine or employing physicians to practice medicine. Moreover, some states prohibit certain entities from engaging in fee-splitting practices that involve sharing in the fees or revenues of a professional practice. These prohibitions may be statutory or regulatory, or may be imposed through judicial or regulatory interpretation. The laws, regulations and interpretations in certain states have been subject to limited judicial and regulatory interpretation and are subject to change.
Pharmacy and Pharmacy Benefits Management (PBM) Regulations
OptumRx’s businesses include home delivery, specialty and compounding pharmacies, as well as clinic-based pharmacies that must be licensed as pharmacies in the states in which they are located. Certain of our home delivery, specialty and compounding pharmacies must also register with the U.S. Drug Enforcement Administration (DEA) and individual state controlled substance authorities to dispense controlled substances. In addition to adhering to the laws and regulations in the states where our home delivery, specialty and compounding pharmacies are located, we also are required to comply with laws and regulations in some non-resident states where we deliver pharmaceuticals, including those requiring us to register with the board of pharmacy in the non-resident state. These non-resident states generally expect our home delivery, specialty and compounding pharmacies to follow the laws of the state in which the pharmacies are located, but some states also require us to comply with the laws of that non-resident state when pharmaceuticals are delivered there. Additionally, certain of our pharmacies that participate in programs for Medicare and state Medicaid providers are required to comply with the applicable Medicare and Medicaid provider rules and regulations. Other laws and regulations affecting our home delivery and specialty pharmacies include federal and state statutes and regulations governing the labeling, packaging, advertising and adulteration of prescription drugs and dispensing of controlled substances. See Part I, Item 1A, “Risk Factors” for a discussion of the risks related to our pharmacy care services businesses.
Federal and state legislation of PBM activities affect both our ability to limit access to a pharmacy provider network or remove network providers. Additionally, many states limit our ability to manage and establish maximum allowable costs for generic prescription drugs. With respect to formulary services, a number of government entities, including CMS, HHS and state departments of insurance, regulate the administration of prescription drug benefits offered through federal or state exchanges. Many states also regulate the scope of prescription drug coverage, as well as the delivery channels to receive such

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prescriptions, for insurers, MCOs and Medicaid managed care plans. These regulations could limit or preclude (i) certain plan designs, (ii) limited networks, (iii) requirements to use particular care providers or distribution channel, (iv) copayment differentials among providers and (v) formulary tiering practices.
Legislation seeking to regulate PBM activities introduced or enacted at the federal or state level could impact our business practices with others in the pharmacy supply chain, including pharmaceutical manufacturers and network providers. Additionally, organizations like the NAIC periodically issue model regulations and credentialing organizations, like the National Committee for Quality Assurance (NCQA) and the Utilization Review Accreditation Commission (URAC), may establish standards that impact PBM pharmacy activities. While these model regulations and standards do not have the force of law, they may influence states to adopt their recommendations and impact the services we deliver to our clients.
Consumer Protection Laws
Certain of our businesses participate in direct-to-consumer activities and are subject to regulations applicable to on-line communications and other general consumer protection laws and regulations such as the Federal Tort Claims Act, the Federal Postal Service Act and the FTC’s Telemarketing Sales Rule. Most states also have similar consumer protection laws.
Certain laws, such as the Telephone Consumer Protection Act, give the FTC, Federal Communications Commission (“FCC”) and state attorneys general the ability to regulate, and bring enforcement actions relating to, telemarketing practices and certain automated outbound contacts such as phone calls, texts or emails. Under certain circumstances, these laws may provide consumers with a private right of action. Violations of these laws could result in substantial statutory penalties and other sanctions.
Banking Regulation
Optum Bank is subject to regulation by federal banking regulators, including the Federal Deposit Insurance Corporation, which performs annual examinations to ensure that the bank is operating in accordance with federal safety and soundness requirements, and the Consumer Financial Protection Bureau, which may perform periodic examinations to ensure that the bank is in compliance with applicable consumer protection statutes, regulations and agency guidelines. Optum Bank is also subject to supervision and regulation by the Utah State Department of Financial Institutions, which carries out annual examinations to ensure that the bank is operating in accordance with state safety and soundness requirements and performs periodic examinations of the bank’s compliance with applicable state banking statutes, regulations and agency guidelines. In the event of unfavorable examination results from any of these agencies, the bank could become subject to increased operational expenses and capital requirements, enhanced governmental oversight and monetary penalties.
International Regulation
Certain of our businesses operate internationally and are subject to regulation in the jurisdictions in which they are organized or conduct business. These regulatory regimes vary from jurisdiction to jurisdiction. In addition, our non-U.S. businesses and operations are subject to U.S. laws that regulate the conduct and activities of U.S.-based businesses operating abroad, such as the Foreign Corrupt Practices Act (FCPA), which prohibits offering, promising, providing or authorizing others to give anything of value to a foreign government official to obtain or retain business or otherwise secure a business advantage.
COMPETITION
As a diversified health care company, we operate in highly competitive markets across the full expanse of health care benefits and services, including organizations ranging from startups to highly sophisticated Fortune 50 global enterprises, for-profit and non-profit companies, and private and government-sponsored entities. New entrants and business combinations also contribute to a dynamic and competitive environment. We compete fundamentally on the quality and value we provide to those we serve, which can include elements such as product and service innovation; use of technology; consumer and provider engagement and satisfaction; sales, marketing and pricing. See Part I, Item 1A, “Risk Factors” for additional discussion of our risks related to competition.
 

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INTELLECTUAL PROPERTY RIGHTS
We have obtained trademark registration for the UnitedHealth Group, UnitedHealthcare and Optum names and logos. We own registrations for certain of our other trademarks in the United States and abroad. We hold a portfolio of patents and have patent applications pending from time to time. We are not substantially dependent on any single patent or group of related patents.
Unless otherwise noted, trademarks appearing in this report are trademarks owned by us. We disclaim any proprietary interest in the marks and names of others.
EMPLOYEES
As of December 31, 2019, we employed 325,000 individuals.
INFORMATION ABOUT OUR EXECUTIVE OFFICERS
The following sets forth certain information regarding our executive officers as of February 14, 2020, including the business experience of each executive officer during the past five years:
Name
 
Age
 
Position
David S. Wichmann
 
57
 
Chief Executive Officer
Andrew P. Witty
 
55
 
President; Chief Executive Officer of Optum
Dirk C. McMahon
 
60
 
Chief Executive Officer of UnitedHealthcare
John F. Rex
 
58
 
Executive Vice President; Chief Financial Officer
Thomas E. Roos
 
47
 
Senior Vice President; Chief Accounting Officer
Marianne D. Short
 
68
 
Executive Vice President; Chief Legal Officer
D. Ellen Wilson
 
62
 
Executive Vice President
Our Board of Directors elects executive officers annually. Our executive officers serve until their successors are duly elected and qualified, or until their earlier death, resignation, removal or disqualification.
Mr. Wichmann is Chief Executive Officer of UnitedHealth Group and a member of the Board of Directors and has served in that capacity since September 2017. Mr. Wichmann previously served as President of UnitedHealth Group from November 2014 to August 2017. Mr. Wichmann also served as Chief Financial Officer of UnitedHealth Group from January 2011 to June 2016. From April 2008 to November 2014, Mr. Wichmann served as Executive Vice President of UnitedHealth Group and President of UnitedHealth Group Operations.
Sir Andrew Witty is President of UnitedHealth Group and Chief Executive Officer of Optum. Sir Andrew has served as President since November 2019 and has served as Chief Executive Officer of Optum since July 2018. Witty previously served as a UnitedHealth Group director from August 2017 to March 2018. Prior to joining UnitedHealth Group, he was Chief Executive Officer and a board member of GlaxoSmithKline, a global pharmaceutical company, from 2008 to April 2017.
Mr. McMahon is Chief Executive Officer of UnitedHealthcare and has served in that capacity since June 2019. Mr. McMahon previously served as President and Chief Operating Officer of Optum from April 2017 to June 2019 and as Executive Vice President, Operations at UnitedHealth Group from November 2014 to April 2017. Mr. McMahon also served as Chief Executive Officer of OptumRx from November 2011 to November 2014. Prior to 2011, he held various positions in UnitedHealthcare in operations, technology and finance.
Mr. Rex is Executive Vice President and Chief Financial Officer of UnitedHealth Group and has served in that capacity since June 2016. From March 2012 to June 2016, Mr. Rex served as Executive Vice President and Chief Financial Officer of Optum. Prior to joining Optum in 2012, Mr. Rex was a Managing Director at JP Morgan, a global financial services firm.
Mr. Roos is Senior Vice President and Chief Accounting Officer of UnitedHealth Group and has served in that capacity since August 2015. Prior to joining UnitedHealth Group, Mr. Roos was a Partner at Deloitte & Touche LLP, an independent registered public accounting firm, from September 2007 to August 2015.
Ms. Short is Executive Vice President and Chief Legal Officer of UnitedHealth Group and has served in that capacity since January 2013. Prior to joining UnitedHealth Group, Ms. Short served as the Managing Partner at Dorsey & Whitney LLP, an international law firm, from January 2007 to December 2012.

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Ms. Wilson is Executive Vice President of UnitedHealth Group and has served in that capacity since June 2013. She also served as Chief Human Resources Officer of UnitedHealth Group from June 2013 through October 2019. From January 2012 to May 2013, Ms. Wilson served as Chief Administrative Officer of Optum. Prior to joining Optum, Ms. Wilson served for 17 years at Fidelity Investments, concluding her tenure there as head of Human Resources.
Additional Information
UnitedHealth Group Incorporated was incorporated in January 1977 in Minnesota. On July 1, 2015, UnitedHealth Group Incorporated changed its state of incorporation from Minnesota to Delaware pursuant to a plan of conversion. Our executive offices are located at UnitedHealth Group Center, 9900 Bren Road East, Minnetonka, Minnesota 55343; our telephone number is (952) 936-1300.
You can access our website at www.unitedhealthgroup.com to learn more about our company. From the site you can download and print copies of our annual reports to shareholders, annual reports on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K, along with amendments to those reports. You can also download from our website our certificate of incorporation, bylaws and corporate governance policies, including our Principles of Governance, Board of Directors Committee Charters and Code of Conduct. We make periodic reports and amendments available, free of charge, on our website, as soon as reasonably practicable after we file or furnish these reports to the Securities and Exchange Commission (SEC). We will also provide a copy of any of our corporate governance policies published on our website free of charge, upon request. To request a copy of any of these documents, please submit your request to: UnitedHealth Group Incorporated, 9900 Bren Road East, Minnetonka, MN 55343, Attn: Corporate Secretary. Information on or linked to our website is neither part of nor incorporated by reference into this Annual Report on Form 10-K or any other SEC filings.
Our transfer agent, Equiniti (EQ), can help you with a variety of shareholder-related services, including change of address, lost stock certificates, transfer of stock to another person and other administrative services. You can write to our transfer agent at: EQ Shareowner Services, P.O. Box 64854, St. Paul, Minnesota 55164-0854, or telephone (800) 401-1957 or (651) 450-4064.
ITEM 1A.
RISK FACTORS
CAUTIONARY STATEMENTS
The statements, estimates, projections or outlook contained in this Annual Report on Form 10-K include forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 (PSLRA). When used in this Annual Report on Form 10-K and in future filings by us with the SEC, in our news releases, presentations to securities analysts or investors, and in oral statements made by or with the approval of one of our executive officers, the words “believe,” “expect,” “intend,” “estimate,” “anticipate,” “forecast,” “outlook,” “plan,” “project,” “should” or similar words or phrases are intended to identify such forward-looking statements. These statements are intended to take advantage of the “safe harbor” provisions of the PSLRA. These forward-looking statements involve risks and uncertainties that may cause our actual results to differ materially from the expectations expressed or implied in the forward-looking statements. Any forward-looking statement in this report speaks only as of the date of this report and, except as required by law; we undertake no obligation to update any forward-looking statement to reflect events or circumstances, including unanticipated events, after the date of this report.
The following discussion contains cautionary statements regarding our business that investors and others should consider. We do not undertake to address in future filings or communications regarding our business or results of operations how any of these factors may have caused our results to differ from discussions or information contained in previous filings or communications. In addition, any of the matters discussed below may have affected past, as well as current, forward-looking statements about future results. Any or all forward-looking statements in this Annual Report on Form 10-K and in any other public filings or statements we make may turn out to be wrong. Our forward-looking statements can be affected by inaccurate assumptions we might make or by known or unknown risks and uncertainties. Many factors discussed below will be important in determining our future results. By their nature, forward-looking statements are not guarantees of future performance or results and are subject to risks, uncertainties and assumptions that are difficult to predict or quantify.
If we fail to estimate, price for and manage our medical costs in an effective manner, the profitability of our risk-based products and services could decline and could materially and adversely affect our results of operations, financial position and cash flows.
Through our risk-based benefit products, we assume the risk of both medical and administrative costs for our customers in return for monthly premiums. We generally use approximately 80% to 85% of our premium revenues to pay the costs of health care services delivered to these customers. The profitability of our products depends in large part on our ability to predict, price for and effectively manage medical costs. Our OptumHealth business negotiates capitation arrangements with commercial third-party payers, which are also included in premium revenues. Under the typical capitation arrangement, the health care provider receives a fixed percentage of a third-party payer’s premiums to cover all or a defined portion of the medical costs

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provided to the capitated member. Premium revenues from risk-based products comprise nearly 80% of our total consolidated revenues. If we fail to predict accurately, or effectively price for or manage the costs of providing care to our capitated members, our results of operations could be materially and adversely affected.
We manage medical costs through underwriting criteria, product design, negotiation of favorable provider contracts and care management programs. Total medical costs are affected by the number of individual services rendered, the cost of each service and the type of service rendered. Our premium revenue on commercial policies and Medicaid contracts are typically based on a fixed monthly rate per individual served for a 12-month period and is generally priced one to six months before the contract commences. Our revenue on Medicare policies is based on bids submitted to CMS in June the year before the contract year. Although we base the commercial and Medicaid premiums we charge and our Medicare bids on our estimates of future medical costs over the fixed contract period, many factors may cause actual costs to exceed those estimated and reflected in premiums or bids. These factors may include medical cost inflation, increased use of services, increased cost of individual services, large-scale medical emergencies, the introduction of new or costly drugs, treatments and technology, new treatment guidelines, new mandated benefits (such as the expansion of essential benefits coverage) or other regulatory changes and insured population characteristics. Relatively small differences between predicted and actual medical costs or utilization rates as a percentage of revenues can result in significant changes in our financial results. For example, if our 2019 medical costs for commercial insured products had been 1% higher than our actual medical costs, without proportionally higher revenues from such products, our annual net earnings for 2019 would have been reduced by approximately $320 million, excluding any offsetting impact from risk adjustment or from reduced premium rebates due to minimum MLRs.
In addition, the financial results we report for any particular period include estimates of costs that have been incurred for which claims are still outstanding. These estimates involve an extensive degree of judgment. If these estimates prove inaccurate, our results of operations could be materially and adversely affected.
Our business activities are highly regulated and new laws or regulations or changes in existing laws or regulations or their enforcement or application could materially and adversely affect our business.
We are regulated by federal, state and local governments in the United States and other countries where we do business. Our insurance and HMO subsidiaries must be licensed by and are subject to regulation in the jurisdictions in which they conduct business. For example, states require periodic financial reports and enforce minimum capital or restricted cash reserve requirements. Health plans and insurance companies are also regulated under state insurance holding company regulations and some of our activities may be subject to other health care-related regulations and requirements, including those relating to PPOs, MCOs, UR and TPA-related regulations and licensure requirements. Under state guaranty association laws, certain insurance companies can be assessed (up to prescribed limits) for certain obligations to the policyholders and claimants of impaired or insolvent insurance companies that write the same line or similar lines of business. Any such assessment could expose our insurance entities and other insurers to the risk that they would be required to pay a portion of an impaired or insolvent insurance company’s claims through state guaranty associations.
Certain of our businesses provide products or services to various government agencies. For example, some of our UnitedHealthcare and Optum businesses hold government contracts or provide services related to government contracts and are subject to U.S. federal and state and non U.S. self-referral, anti-kickback, medical necessity, risk adjustment, false claims and other laws and regulations governing government contractors and the use of government funds. Our relationships with these government agencies are subject to the terms of contracts that we hold with the agencies and to laws and regulations regarding government contracts. Among others, certain laws and regulations restrict or prohibit companies from performing work for government agencies that might be viewed as an actual or potential conflict of interest. These laws may limit our ability to pursue and perform certain types of work, thereby materially and adversely affecting our results of operations, financial position and cash flows.
Certain of our Optum businesses are also subject to regulations that are distinct from those faced by our insurance and HMO subsidiaries, including, for example, state telemedicine regulations; debt collection laws; banking regulations; distributor and producer licensing requirements; state corporate practice of medicine doctrines; fee-splitting rules; and health care facility licensure and certificate of need requirements, some of which could impact our relationships with physicians, hospitals and customers. These risks and uncertainties may materially and adversely affect our ability to market or provide our products and services, or to do so at targeted operating margins, or may increase the regulatory burdens under which we operate.
The laws and rules governing our businesses and interpretations of those laws and rules are subject to frequent change. For example, legislative, administrative and public policy changes to the ACA are being considered, and we cannot predict if the ACA will be further modified or repealed or replaced. Litigation challenges have been brought seeking to invalidate the ACA in whole or in part; and a federal appeals court struck down the ACA as in part unconstitutional in 2019. That case has been remanded to federal district court. Further, the integration into our businesses of entities that we acquire may affect the way in which existing laws and rules apply to us, including by subjecting us to laws and rules that did not previously apply to us. The broad latitude given to the agencies administering, interpreting and enforcing current and future regulations governing our

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businesses could force us to change how we do business, restrict revenue and enrollment growth, increase our health care and administrative costs and capital requirements, or expose us to increased liability in courts for coverage determinations, contract interpretation and other actions.
We also must obtain and maintain regulatory approvals to market many of our products and services, increase prices for certain regulated products and services and complete certain acquisitions and dispositions or integrate certain acquisitions. For example, premium rates for our health insurance and managed care products are subject to regulatory review or approval in many states and by the federal government. Additionally, we must submit data on all proposed rate increases on many of our products to HHS for monitoring purposes. Geographic and product expansions may be subject to state and federal regulatory approvals. Delays in obtaining necessary approvals or our failure to obtain or maintain adequate approvals could materially and adversely affect our results of operations, financial position and cash flows.
Certain of our businesses operate internationally and are subject to regulation in the jurisdictions in which they are organized or conduct business. These regulatory regimes encompass, among other matters, local and cross-border taxation, licensing, tariffs, intellectual property, investment, capital (including minimum solvency margin and reserve requirements), management control, labor, anti-fraud, anti-corruption and privacy and data protection regulations (including requirements for cross-border data transfers) that vary by jurisdiction. We currently operate outside of the United States and in the future may acquire or commence additional businesses based outside of the United States, increasing our exposure to non-U.S. regulatory regimes. For example, our UnitedHealthcare Global business subjects us to Brazilian laws and regulations affecting hospitals, managed care and insurance industries and to regulation by Brazilian regulators, including the national regulatory agency for private health insurance and plans, the Agência Nacional de Saúde Suplementar, while the Banmédica business is subject to Chilean, Colombian and Peruvian laws, regulations and regulators applicable to hospitals and private insurance. Any international regulator may take an approach to the interpretation, implementation and enforcement of industry regulations that could differ from the approach taken by U.S. regulators. In addition, our non-U.S. businesses and operations are subject to U.S. laws that regulate the conduct and activities of U.S.-based businesses operating abroad, such as the FCPA, which prohibits offering, promising, providing or authorizing others to give anything of value to a foreign government official to obtain or retain business or otherwise secure a business advantage. Our failure to comply with U.S. or non-U.S. laws and regulations governing our conduct outside the United States or to establish constructive relations with non-U.S. regulators could adversely affect our ability to market our products and services, or to do so at targeted operating margins, which may have a material adverse effect on our business, financial condition and results of operations.
The health care industry is regularly subject to negative publicity, including as a result of governmental investigations, adverse media coverage and political debate surrounding industry regulation. Negative publicity may adversely affect our stock price and damage our reputation in various markets.
As a result of our participation in various government health care programs, both as a payer and as a service provider to payers, we are exposed to additional risks associated with program funding, enrollments, payment adjustments, audits and government investigations that could materially and adversely affect our business, results of operations, financial position and cash flows.
We participate in various federal, state and local government health care benefit programs, including as a payer in Medicare Advantage, Medicare Part D, various Medicaid programs and CHIP, and receive substantial revenues from these programs. Certain of our Optum businesses also provide services to payers participating in government health care programs. A reduction or less than expected increase, or a protracted delay, in government funding for these programs or change in allocation methodologies, or termination of the contract at the option of the government, may materially and adversely affect our results of operations, financial position and cash flows.
The government health care programs in which we participate generally are subject to frequent changes, including changes that may reduce the number of persons enrolled or eligible for coverage, reduce the amount of reimbursement or payment levels, reduce our participation in certain service areas or markets, or increase our administrative or medical costs under such programs. Revenues for these programs depend on periodic funding from the federal government or applicable state governments and allocation of the funding through various payment mechanisms. Funding for these government programs depends on many factors outside of our control, including general economic conditions and budgetary constraints at the federal or applicable state level. For example, CMS has in the past reduced or frozen Medicare Advantage benchmarks, and additional cuts to Medicare Advantage benchmarks are possible. In addition, from time to time, CMS makes changes to the way it calculates Medicare Advantage risk adjustment payments. Although we have adjusted members’ benefits and premiums on a selective basis, ceased to offer benefit plans in certain counties, and intensified both our medical and operating cost management in response to the benchmark reductions and other funding pressures, these or other strategies may not fully address the funding pressures in the Medicare Advantage program. In addition, payers in the Medicare Advantage program may be subject to reductions in payments from CMS as a result of decreased funding or recoupment pursuant to government audit.
Under the Medicaid managed care program, state Medicaid agencies seek bids from eligible health plans to continue their participation in the acute care Medicaid health programs. If we are not successful in obtaining renewals of state Medicaid

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managed care contracts, we risk losing the members that were enrolled in those Medicaid plans. Under the Medicare Part D program, to qualify for automatic enrollment of low income members, our bids must result in an enrollee premium below a regional benchmark, which is calculated by the government after all regional bids are submitted. If the enrollee premium is not below the government benchmark, we risk losing the members who were auto-assigned to us and will not have additional members auto-assigned to us. In general, our bids are based upon certain assumptions regarding enrollment, utilization, medical costs and other factors. If any of these assumptions is materially incorrect, either as a result of unforeseen changes to the programs on which we bid, implementation of material program or policy changes after our bid submission, or submission by our competitors at lower rates than our bids, our results of operations, financial position and cash flows could be materially and adversely affected.
Many of the government health care coverage programs in which we participate are subject to the prior satisfaction of certain conditions or performance standards or benchmarks. For example, as part of the ACA, CMS has a system that provides various quality bonus payments to Medicare Advantage plans that meet certain quality star ratings at the individual plan or local contract level. The star rating system considers various measures adopted by CMS, including, among others, quality of care, preventive services, chronic illness management and customer satisfaction. Plans must have a rating of four stars or higher to qualify for bonus payments. If we do not maintain or continue to improve our star ratings, our plans may not be eligible for quality bonuses and we may experience a negative impact on our revenues and the benefits that our plans can offer, which could materially and adversely affect the marketability of our plans, our membership levels, results of operations, financial position and cash flows. Any changes in standards or care delivery models that apply to government health care programs, including Medicare and Medicaid, or our inability to improve our quality scores and star ratings to meet government performance requirements or to match the performance of our competitors could result in limitations to our participation in or exclusion from these or other government programs, which in turn could materially and adversely affect our results of operations, financial position and cash flows.
CMS uses various payment mechanisms to allocate funding for Medicare programs, including adjustment of monthly capitation payments to Medicare Advantage plans and Medicare Part D plans according to the predicted health status of each beneficiary as supported by data from health care providers for Medicare Advantage plans, as well as, for Medicare Part D plans, risk-sharing provisions based on a comparison of costs predicted in our annual bids to actual prescription drug costs. Some state Medicaid programs utilize a similar process. For example, our UnitedHealthcare Medicare & Retirement and UnitedHealthcare Community & State businesses submit information relating to the health status of enrollees to CMS or state agencies for purposes of determining the amount of certain payments to us. CMS and the Office of Inspector General for HHS periodically perform risk adjustment data validation (RADV) audits of selected Medicare health plans to validate the coding practices of and supporting documentation maintained by health care providers. Certain of our local plans have been selected for such audits, which have in the past resulted and could in the future result in retrospective adjustments to payments made to our health plans, fines, corrective action plans or other adverse action by CMS.
We have been and may in the future become involved in routine, regular and special governmental investigations, audits, reviews and assessments. Such investigations, audits, reviews or assessments sometimes arise out of, or prompt claims by private litigants or whistleblowers that, among other allegations, we failed to disclose certain business practices or, as a government contractor, submitted false or erroneous claims to the government. Governmental investigations, audits, reviews and assessments could lead to government actions, which could result in adverse publicity, the assessment of damages, civil or criminal fines or penalties, or other sanctions, including restrictions or changes in the way we conduct business, loss of licensure or exclusion from participation in government programs, any of which could have a material adverse effect on our business, results of operations, financial position and cash flows.
If we fail to maintain properly the integrity or availability of our data or successfully consolidate, integrate, upgrade or expand our existing information systems, or if our technology products do not operate as intended, our business could be materially and adversely affected.
Our business is highly dependent on the integrity and timeliness of the data we use to serve our members, customers and health care professionals and to operate our business. The volume of health care data generated, and the uses of data, including electronic health records, are rapidly expanding. Our ability to implement new and innovative services, price adequately our products and services, provide effective service to our customers in an efficient and uninterrupted fashion, and report accurately our results of operations depends on the integrity of the data in our information systems. In addition, connectivity among technologies is becoming increasingly important and recent trends toward greater consumer engagement in health care require new and enhanced technologies, including more sophisticated applications for mobile devices. Our information systems require an ongoing commitment of significant resources to maintain, protect and enhance existing systems and develop new systems to keep pace with continuing changes in information processing technology, evolving systems and regulatory standards and changing customer preferences. If the data we rely upon to run our businesses is found to be inaccurate or unreliable or if we fail to maintain or protect our information systems and data integrity effectively, we could experience failures in our health, wellness and information technology products; lose existing customers; have difficulty attracting new customers; experience

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problems in determining medical cost estimates and establishing appropriate pricing; have difficulty preventing, detecting and controlling fraud; have disputes with customers, physicians and other health care professionals; become subject to regulatory sanctions or penalties; incur increases in operating expenses or suffer other adverse consequences.
We periodically consolidate, integrate, upgrade and expand our information systems’ capabilities as a result of technology initiatives and recently enacted regulations, changes in our system platforms and integration of new business acquisitions. Our process of consolidating the number of systems we operate, upgrading and expanding our information systems’ capabilities, enhancing our systems and developing new systems to keep pace with continuing changes in information processing technology may not be successful. Failure to protect, consolidate and integrate our systems successfully could result in higher than expected costs and diversion of management’s time and energy, which could materially and adversely affect our results of operations, financial position and cash flows.
Certain of our businesses sell and install software products that may contain unexpected design defects or may encounter unexpected complications during installation or when used with other technologies utilized by the customer. A failure of our technology products to operate as intended and in a seamless fashion with other products could materially and adversely affect our results of operations, financial position and cash flows.
Uncertain and rapidly evolving U.S. federal and state, non-U.S. and international laws and regulations related to health data and the health information technology market may alter the competitive landscape or present compliance challenges and could materially and adversely affect the configuration of our information systems and platforms, and our ability to compete in this market.
If we sustain cyber-attacks or other privacy or data security incidents that result in security breaches that disrupt our operations or result in the unintended dissemination of protected personal information or proprietary or confidential information, we could suffer a loss of revenue and increased costs, exposure to significant liability, reputational harm and other serious negative consequences.
We routinely process, store and transmit large amounts of data in our operations, including protected personal information as well as proprietary or confidential information relating to our business or third parties. Some of the data we process, store and transmit may be outside of the United States due to our information technology systems and international business operations. We are regularly the target of attempted cyber-attacks and other security threats and may be subject to breaches of the information technology systems we use. We have programs in place that are intended to detect, contain and respond to data security incidents and that provide employee awareness training regarding phishing, malware and other cyber risks to protect against cyber risks and security breaches. However, because the techniques used to obtain unauthorized access, disable or degrade service, or sabotage systems change frequently and may be difficult to detect for long periods of time, we may be unable to anticipate these techniques or implement adequate preventive measures. Experienced computer programmers and hackers may be able to penetrate our security controls and access, misappropriate or otherwise compromise protected personal information or proprietary or confidential information or that of third-parties, create system disruptions or cause system shutdowns that could negatively affect our operations. They also may be able to develop and deploy viruses, worms and other malicious software programs that attack our systems or otherwise exploit any security vulnerabilities. Hardware, software, or applications we develop or procure from third parties may contain defects in design or manufacture or other problems that could unexpectedly compromise information security. Our facilities and services may also be vulnerable to security incidents or security attacks; acts of vandalism or theft; coordinated attacks by activist entities; misplaced or lost data; human error; malicious social engineering; or other events that could negatively affect our systems, our customers’ data, proprietary or confidential information relating to our business or third parties, or our operations. In certain circumstances we may rely on third party vendors to process, store and transmit large amounts of data for our business whose operations are subject to similar risks.
The costs to eliminate or address the foregoing security threats and vulnerabilities before or after a cyber-incident could be material. Our remediation efforts may not be successful and could result in interruptions, delays, or cessation of service and loss of existing or potential customers. In addition, breaches of our security measures and the unauthorized dissemination of sensitive personal information, proprietary information or confidential information about us or our customers or other third-parties, could expose our customers’ private information and our customers to the risk of financial or medical identity theft, or expose us or other third-parties to a risk of loss or misuse of this information, result in litigation and potential liability, including regulatory penalties, for us, damage our brand and reputation, or otherwise harm our business.
If we fail to comply with applicable privacy, security and data laws, regulations and standards, including with respect to third-party service providers that utilize protected personal information on our behalf, our business, reputation, results of operations, financial position and cash flows could be materially and adversely affected.
The collection, maintenance, protection, use, transmission, disclosure and disposal of protected personal information is regulated at the federal, state, international and industry levels and requirements are imposed on us by contracts with customers. These laws, rules and requirements are subject to change. Compliance with new privacy and security laws,

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regulations and requirements may result in increased operating costs, and may constrain or require us to alter our business model or operations.
Internationally, many of the jurisdictions in which we operate have established their own data security and privacy legal framework with which we or our customers must comply. We expect that there will continue to be new proposed laws, regulations and industry standards concerning privacy, data protection and information security in the European Union, Brazil, Chile, India and other jurisdictions, and we cannot yet determine the impacts such future laws, regulations and standards may have on our businesses or the businesses of our customers. For example, effective May 2018, the European Union’s General Data Protection Regulation (GDPR) overhauled data protection laws in the European Union. The new regulation superseded prior European Union privacy and data protection legislation, imposed more stringent European Union data protection requirements on us or our customers, and prescribed greater penalties for noncompliance. Brazilian privacy legislation, similar in certain respects to GDPR, goes into effect in 2020.
Many of our businesses are also subject to the Payment Card Industry Data Security Standard, which is a multifaceted security standard that is designed to protect credit card account data.
HIPAA requires business associates as well as covered entities to comply with certain privacy and security requirements. While we provide for appropriate protections through our contracts with our third-party service providers and in certain cases assess their security controls, we have limited oversight or control over their actions and practices. Several of our businesses act as business associates to their covered entity customers and, as a result, collect, use, disclose and maintain protected personal information in order to provide services to these customers. HHS administers its audit program to assess HIPAA compliance efforts by covered entities and business associates. An audit resulting in findings or allegations of noncompliance could have a material adverse effect on our results of operations, financial position and cash flows.
Through our Optum businesses, including our Optum Labs business, we maintain a database of administrative and clinical data that is statistically de-identified in accordance with HIPAA standards. Noncompliance or findings of noncompliance with applicable laws, regulations or requirements, or the occurrence of any privacy or security breach involving the misappropriation, loss or other unauthorized disclosure of protected personal information, whether by us or by one of our third-party service providers, could have a material adverse effect on our reputation and business and, among other consequences, could subject us to mandatory disclosure to the media, loss of existing or new customers, significant increases in the cost of managing and remediating privacy or security incidents and material fines, penalties and litigation awards. Any of these consequences could have a material and adverse effect on our results of operations, financial position and cash flows.
Our businesses providing pharmacy care services face regulatory and operational risks and uncertainties that may differ from the risks of our other businesses.
We provide pharmacy care services through our OptumRx and UnitedHealthcare businesses. Each business is subject to federal and state anti-kickback, beneficiary inducement and other laws that govern the relationships of the business with pharmaceutical manufacturers, physicians, pharmacies, customers and consumers. In addition, federal and state legislatures regularly consider new regulations for the industry that could materially affect current industry practices, including potential new legislation and regulations regarding the receipt or disclosure of rebates and other fees from pharmaceutical companies, the development and use of formularies and other utilization management tools, the use of average wholesale prices or other pricing benchmarks, pricing for specialty pharmaceuticals, limited access to networks and pharmacy network reimbursement methodologies. Additionally, various governmental agencies have conducted investigations into certain PBM practices, which have resulted in other PBMs agreeing to civil penalties, including the payment of money and entry into corporate integrity agreements. As a provider of pharmacy benefit management services, OptumRx is also subject to an increasing number of licensure, registration and other laws and accreditation standards that impact the business practices of a pharmacy benefit manager. OptumRx also conducts business through home delivery, specialty and compounding pharmacies, pharmacies located in community mental health centers and home infusion, which subjects it to extensive federal, state and local laws and regulations, including those of the DEA and individual state controlled substance authorities, the Food and Drug Administration (FDA) and Boards of Pharmacy.
We could face potential claims in connection with purported errors by our home delivery, specialty or compounding or clinic-based pharmacies or the provision of home infusion services, including as a result of the risks inherent in the packaging and distribution of pharmaceuticals and other health care products. Disruptions from any of our home delivery, specialty pharmacy or home infusion services could materially and adversely affect our results of operations, financial position and cash flows.
In addition, our pharmacy care services businesses provide services to sponsors of health benefit plans that are subject to ERISA. A private party or the DOL, which is the agency that enforces ERISA, could assert that the fiduciary obligations imposed by the statute apply to some or all of the services provided by our pharmacy care services businesses even where those businesses are not contractually obligated to assume fiduciary obligations. If a court were to determine that fiduciary obligations apply, we could be subject to claims for breaches of fiduciary obligations or claims that we entered into certain prohibited transactions.

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If we fail to compete effectively to maintain or increase our market share, including maintaining or increasing enrollments in businesses providing health benefits, our results of operations, financial position and cash flows could be materially and adversely affected.
Our businesses compete throughout the United States, South America and other foreign markets and face significant competition in all of the geographic markets in which we operate. In particular markets, our competitors, compared to us, may have greater capabilities, resources or market share; a more established reputation; superior supplier or health care professional arrangements; better existing business relationships; lower profit margin or financial return expectations; or other factors that give such competitors a competitive advantage. Our competitive position may also be adversely affected by significant merger and acquisition activity that has occurred in the industries in which we operate, both among our competitors and suppliers (including hospitals, physician groups and other health care professionals). Consolidation may make it more difficult for us to retain or increase our customer base, improve the terms on which we do business with our suppliers, or maintain or increase profitability.
In addition, our success in the health care marketplace will depend on our ability to develop and deliver innovative and potentially disruptive products and services to satisfy evolving market demands. If we do not continue to innovate and provide products and services that are useful and relevant to consumers, we may not remain competitive, and we risk losing market share to existing competitors and disruptive new market entrants. For example, new direct-to-consumer business models from competing businesses may make it more difficult for us to directly engage consumers in the selection and management of their health care benefits and health care usage, and we may face challenges from new technologies and market entrants that could affect our existing relationship with health plan enrollees in these areas. Our business, results of operations, financial position and cash flows could be materially and adversely affected if we do not compete effectively in our markets, if we set rates too high or too low in highly competitive markets, if we do not design and price our products properly and competitively, if we are unable to innovate and deliver products and services that demonstrate value to our customers, if we do not provide a satisfactory level of services, if membership or demand for other services does not increase as we expect or declines, or if we lose accounts with more profitable products while retaining or increasing membership in accounts with less profitable products.
If we fail to develop and maintain satisfactory relationships with physicians, hospitals and other service providers, our business could be materially and adversely affected.
Our results of operations and prospects are substantially dependent on our continued ability to contract with physicians, hospitals, pharmaceutical benefit service providers, pharmaceutical manufacturers and other service providers at competitive prices. Any failure by us to develop and maintain satisfactory relationships with health care providers, whether in-network or out-of-network, could materially and adversely affect our business, results of operations, financial position and cash flows. In addition, certain activities related to network design, provider participation in networks and provider payments could result in disputes that may be costly, divert management’s attention from our operations and result in negative publicity.
In any particular market, physicians and health care providers could refuse to contract, demand higher payments, or take other actions that could result in higher medical costs, less desirable products for customers or difficulty meeting regulatory or accreditation requirements. In some markets, certain health care providers, particularly hospitals, physician and hospital organizations or multi-specialty physician groups, may have significant market positions or near monopolies that could result in diminished bargaining power on our part. In addition, ACOs; practice management companies (which aggregate physician practices for administrative efficiency); and other organizational structures adopted by physicians, hospitals and other care providers may change the way in which these providers do business with us and may change the competitive landscape. Such organizations or groups of physicians may compete directly with us, which could adversely affect our business, and our results of operations, financial position and cash flows by impacting our relationships with these providers or affecting the way that we price our products and estimate our costs, which might require us to incur costs to change our operations. In addition, if these providers refuse to contract with us, use their market position to negotiate favorable contracts or place us at a competitive disadvantage, our ability to market products or to be profitable in those areas could be materially and adversely affected.
Our health care benefits businesses have capitation arrangements with some physicians, hospitals and other health care providers. Capitation arrangements limit our exposure to the risk of increasing medical costs, but expose us to risk related to the adequacy of the financial and medical care resources of the health care provider. To the extent that a capitated health care provider organization faces financial difficulties or otherwise is unable to perform its obligations under the capitation arrangement, we may be held responsible for unpaid health care claims that should have been the responsibility of the capitated health care provider and for which we have already paid the provider. Further, payment or other disputes between a primary care provider and specialists with whom the primary care provider contracts could result in a disruption in the provision of services to our members or a reduction in the services available to our members. Health care providers with which we contract may not properly manage the costs of services, maintain financial solvency or avoid disputes with other providers. Any of these events could have a material adverse effect on the provision of services to our members and our operations.
Some providers that render services to our members do not have contracts with us. In those cases, we do not have a pre-established understanding about the amount of compensation that is due to the provider for services rendered to our members.

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In some states, the amount of compensation due to these out-of-network providers is defined by law or regulation, but in most instances the amount is either not defined or is established by a standard that does not clearly specify dollar terms. In some instances, providers may believe that they are underpaid for their services and may either litigate or arbitrate their dispute with us or try to recover from our members the difference between what we have paid them and the amount they charged us.
The success of some of our businesses, including OptumHealth and UnitedHealthcare Global, depend on maintaining satisfactory relationships with physicians as our employees, independent contractors or joint venture partners. The physicians that practice medicine or contract with our affiliated physician organizations could terminate their provider contracts or otherwise become unable or unwilling to continue practicing medicine or contracting with us. We face and will likely continue to face heightened competition in the markets where we operate to acquire or manage physician practices or to employ or contract with individual physicians. If we are unable to maintain or grow satisfactory relationships with physicians, or to acquire, recruit or, in some instances, employ physicians, or to retain enrollees following the departure of a physician, our revenues could be materially and adversely affected. In addition, our affiliated physician organizations contract with competitors of UnitedHealthcare. Our businesses could suffer if our affiliated physician organizations fail to maintain relationships with these companies, or fail to adequately price their contracts with these third-party payers.
In addition, physicians, hospitals, pharmaceutical benefit service providers, pharmaceutical manufacturers and certain health care providers are customers of our Optum businesses. Physicians also provide medical services at facilities owned by our Optum businesses. Given the importance of health care providers and other constituents to our businesses, failure to maintain satisfactory relationships with them could materially and adversely affect our results of operations, financial position and cash flows.
We are routinely subject to various legal actions due to the nature of our business, which could damage our reputation and, if resolved unfavorably, could result in substantial penalties or monetary damages and materially and adversely affect our results of operations, financial position and cash flows.
We are routinely made party to a variety of legal actions related to, among other matters, the design, management and delivery of our product and service offerings. These matters have included or could in the future include matters related to health care benefits coverage and payment claims (including disputes with enrollees, customers and contracted and non-contracted physicians, hospitals and other health care professionals), tort claims (including claims related to the delivery of health care services, such as medical malpractice by staff at our affiliates’ facilities, or by health care practitioners who are employed by us, have contractual relationships with us, or serve as providers to our managed care networks), whistleblower claims (including claims under the False Claims Act or similar statutes), contract and labor disputes, tax claims and claims related to disclosure of certain business practices. We may also be party to certain class action lawsuits brought by health care professional groups and consumers. In addition, we operate in jurisdictions outside of the United States where contractual rights, tax positions and applicable regulations may be subject to interpretation or uncertainty to a greater degree than in the United States, and therefore subject to dispute by customers, government authorities or others. We are largely self-insured with regard to litigation risks. While we maintain excess liability insurance with outside insurance carriers for claims in excess of our self-insurance, certain types of damages, such as punitive damages in some circumstances, are not covered by insurance. Although we record liabilities for our estimates of the probable costs resulting from self-insured matters, it is possible that the level of actual losses will significantly exceed the liabilities recorded.
We cannot predict the outcome of significant legal actions in which we are involved and are incurring expenses in resolving these matters. The legal actions we face or may face in the future could further increase our cost of doing business and materially and adversely affect our results of operations, financial position and cash flows. In addition, certain legal actions could result in adverse publicity, which could damage our reputation and materially and adversely affect our ability to retain our current business or grow our market share in some markets and businesses.
Any failure by us to manage successfully our strategic alliances or complete, manage or integrate acquisitions and other significant strategic transactions or relationships domestically or outside the United States could materially and adversely affect our business, prospects, results of operations, financial position and cash flows.
As part of our business strategy, we frequently engage in discussions with third parties regarding possible investments, acquisitions, divestitures, strategic alliances, joint ventures and outsourcing transactions and often enter into agreements relating to such transactions. For example, we have a strategic alliance with AARP under which we provide AARP-branded Medicare Supplement insurance to AARP members and other AARP-branded products and services to Medicare beneficiaries. If we fail to meet the needs of our alliance or joint venture partners, including by developing additional products and services, providing high levels of service, pricing our products and services competitively or responding effectively to applicable federal and state regulatory changes, our alliances and joint ventures could be damaged or terminated, which in turn could adversely impact our reputation, business and results of operations. Further, if we fail to identify and successfully complete transactions that further our strategic objectives, we may be required to expend resources to develop products and

19



technology internally, we may be placed at a competitive disadvantage or we may be adversely affected by negative market perceptions, any of which may have a material adverse effect on our results of operations, financial position or cash flows.
Success in completing acquisitions is also dependent on efficiently integrating the acquired business into our existing operations, including our internal control environment, or otherwise leveraging its operations, which may present challenges that are different from those presented by organic growth and that may be difficult for us to manage. If we cannot successfully integrate these acquisitions and realize contemplated revenue growth opportunities and cost savings, our business, prospects, results of operations, financial position and cash flows could be materially and adversely affected.
As we expand and operate our business outside of the United States, we are presented with challenges that differ from those presented by acquisitions of domestic businesses, including challenges in adapting to new markets, languages, business, labor and cultural practices and regulatory environments. Adapting to these challenges could require us to devote significant senior management attention and other resources to the acquired businesses before we realize anticipated synergies or other benefits from the acquired businesses. These challenges vary widely by country and, outside of the United States, may include political instability, government intervention, discriminatory regulation and currency exchange controls or other restrictions that could prevent us from transferring funds from these operations out of the countries in which our acquired businesses operate, or converting local currencies that we hold into U.S. dollars or other currencies. If we are unable to manage successfully our non-U.S. acquisitions, our business, prospects, results of operations and financial position could be materially and adversely affected.
Foreign currency exchange rates and fluctuations may have an impact on our shareholders’ equity from period to period, which could adversely affect our debt to debt-plus-equity ratio, and our future revenues, costs and cash flows from international operations. Any measures we may implement to reduce the effect of volatile currencies may be costly or ineffective.
Our sales performance will suffer if we do not adequately attract, retain and provide support to a network of independent producers and consultants.
Our products and services are sold in part through nonexclusive producers and consultants for whose services and allegiance we must compete. Our sales would be materially and adversely affected if we are unable to attract, retain and support such independent producers and consultants or if our sales strategy is not appropriately aligned across distribution channels. Our relationships with producers could be materially and adversely impacted by changes in our business practices and the nature of our relationships to address these pressures, including potential reductions in commission levels.
A number of investigations have been conducted regarding the marketing practices of producers selling health care products and the payments they receive and have resulted in enforcement actions against companies in our industry and producers marketing and selling those companies’ products. If we were subjected to similar investigations and enforcement actions, such actions could result in penalties and the imposition of corrective action plans, which could materially and adversely impact our ability to market our products.
Unfavorable economic conditions could materially and adversely affect our revenues and our results of operations.
Unfavorable economic conditions may impact demand for certain of our products and services. For example, high unemployment can cause lower enrollment or lower rates of renewal in our employer group plans. Unfavorable economic conditions also have caused and could continue to cause employers to stop offering certain health care coverage as an employee benefit or elect to offer this coverage on a voluntary, employee-funded basis as a means to reduce their operating costs. In addition, unfavorable economic conditions could adversely impact our ability to increase premiums or result in the cancellation by certain customers of our products and services. These conditions could lead to a decrease in our membership levels and premium and fee revenues and could materially and adversely affect our results of operations, financial position and cash flows.
During a prolonged unfavorable economic environment, state and federal budgets could be materially and adversely affected, resulting in reduced reimbursements or payments in our federal and state government health care coverage programs, including Medicare, Medicaid and CHIP. A reduction in state Medicaid reimbursement rates could be implemented retrospectively to apply to payments already negotiated or received from the government and could materially and adversely affect our results of operations, financial position and cash flows. In addition, state and federal budgetary pressures could cause the affected governments to impose new or a higher level of taxes or assessments for our commercial programs, such as premium taxes on health insurance and surcharges or fees on select fee-for-service and capitated medical claims. Any of these developments or actions could materially and adversely affect our results of operations, financial position and cash flows.
A prolonged unfavorable economic environment also could adversely impact the financial position of hospitals and other care providers, which could materially and adversely affect our contracted rates with these parties and increase our medical costs or materially and adversely affect their ability to purchase our service offerings. Further, unfavorable economic conditions could adversely impact the customers of our Optum businesses, including health plans, hospitals, care providers, employers and others, which could, in turn, materially and adversely affect Optum’s financial results.

20



Our investment portfolio may suffer losses, which could adversely affect our results of operations, financial position and cash flows.
Market fluctuations could impair our profitability and capital position. Volatility in interest rates affects our interest income and the market value of our investments in debt securities of varying maturities, which constitute the vast majority of the fair value of our investments as of December 31, 2019. Relatively low interest rates on investments, such as those experienced during recent years, have adversely impacted our investment income. In addition, a delay in payment of principal or interest by issuers, or defaults by issuers (primarily issuers of our investments in corporate and municipal bonds), could reduce our investment income and require us to write down the value of our investments, which could adversely affect our profitability and equity.
There can be no assurance that our investments will produce total positive returns or that we will not sell investments at prices that are less than their carrying values. Changes in the value of our investment assets, as a result of interest rate fluctuations, changes in issuer financial conditions, illiquidity or otherwise, could have an adverse effect on our equity. In addition, if it became necessary for us to liquidate our investment portfolio on an accelerated basis, such an action could have an adverse effect on our results of operations and the capital position of our regulated subsidiaries.
If the value of our intangible assets is materially impaired, our results of operations, equity and credit ratings could be materially and adversely affected.
As of December 31, 2019, our goodwill and other intangible assets had a carrying value of $76 billion, representing 44% of our total consolidated assets. We periodically evaluate our goodwill and other intangible assets to determine whether all or a portion of their carrying values may be impaired, in which case a charge to earnings may be necessary. The value of our goodwill may be materially and adversely impacted if businesses that we acquire perform in a manner that is inconsistent with our assumptions. In addition, from time to time we divest businesses, and any such divestiture could result in significant asset impairment and disposition charges, including those related to goodwill and other intangible assets. Any future evaluations requiring an impairment of our goodwill and other intangible assets could materially and adversely affect our results of operations and equity in the period in which the impairment occurs. A material decrease in equity could, in turn, adversely affect our credit ratings and potentially impact our compliance with the financial covenants in our bank credit facilities.
If we are not able to protect our proprietary rights to our databases, software and related products, our ability to market our knowledge and information-related businesses could be hindered and our results of operations, financial position and cash flows could be materially and adversely affected.
We rely on our agreements with customers, confidentiality agreements with employees and third parties, and our trademarks, trade secrets, copyrights and patents to protect our proprietary rights. These legal protections and precautions may not prevent misappropriation of our proprietary information. In addition, substantial litigation regarding intellectual property rights exists in the software industry, and we expect software products to be increasingly subject to third-party infringement claims as the number of products and competitors in this industry segment grows. Such litigation and misappropriation of our proprietary information could hinder our ability to market and sell products and services and our results of operations, financial position and cash flows could be materially and adversely affected.
Restrictions on our ability to obtain funds from our regulated subsidiaries could materially and adversely affect our results of operations, financial position and cash flows.
Because we operate as a holding company, we are dependent on dividends and administrative expense reimbursements from our subsidiaries to fund our obligations. Many of these subsidiaries are regulated by departments of insurance or similar regulatory authorities. We are also required by law or regulation to maintain specific prescribed minimum amounts of capital in these subsidiaries. The levels of capitalization required depend primarily on the volume of premium revenues generated by the applicable subsidiary. In most states, we are required to seek approval by state regulatory authorities before we transfer money or pay dividends from our regulated subsidiaries that exceed specified amounts. An inability of our regulated subsidiaries to pay dividends to their parent companies in the desired amounts or at the time of our choosing could adversely affect our ability to reinvest in our business through capital expenditures or business acquisitions, as well as our ability to maintain our corporate quarterly dividend payment, repurchase shares of our common stock and repay our debt. If we are unable to obtain sufficient funds from our subsidiaries to fund our obligations, our results of operations, financial position and cash flows could be materially and adversely affected.
Any downgrades in our credit ratings could adversely affect our business, financial condition and results of operations.
Claims paying ability, financial strength and debt ratings by Nationally Recognized Statistical Rating Organizations are important factors in establishing the competitive position of insurance companies. Ratings information is broadly disseminated and generally used by customers and creditors. We believe our claims paying ability and financial strength ratings are important factors in marketing our products to certain of our customers. Our credit ratings impact both the cost and availability of future borrowings. Each of the credit rating agencies reviews its ratings periodically. Our ratings reflect each credit rating agency’s opinion of our financial strength, operating performance and ability to meet our debt obligations or obligations to

21



policyholders. There can be no assurance that our current credit ratings will be maintained in the future. Any downgrades in our credit ratings could materially increase our costs of or ability to access funds in the debt capital markets and otherwise materially increase our operating costs.
ITEM 1B.
UNRESOLVED STAFF COMMENTS
None.
ITEM 2.
PROPERTIES
To support our business operations in the United States and other countries we own and lease real properties. Our various reportable segments use these facilities for their respective business purposes, and we believe these current facilities are suitable for their respective uses and are adequate for our anticipated future needs.
ITEM 3.
LEGAL PROCEEDINGS
The information required by this Item 3 is incorporated herein by reference to the information set forth under the captions “Legal Matters” and “Governmental Investigations, Audits and Reviews” in Note 12 of Notes to the Consolidated Financial Statements included in Part II, Item 8, “Financial Statements and Supplementary Data.”
ITEM 4.
MINE SAFETY DISCLOSURES
Not Applicable.
PART II
ITEM 5.
MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED SHAREHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
MARKET AND HOLDERS
Our common stock is traded on the New York Stock Exchange (NYSE) under the symbol UNH. On January 31, 2020, there were 11,517 registered holders of record of our common stock.
DIVIDEND POLICY
In June 2019, the Company’s Board of Directors increased the Company’s quarterly cash divided to shareholders to an annual rate of $4.32 compared to $3.60 per share, which the Company had paid since June 2018. Declaration and payment of future quarterly dividends is at the discretion of the Board and may be adjusted as business needs or market conditions change.
ISSUER PURCHASES OF EQUITY SECURITIES
In November 1997, our Board of Directors adopted a share repurchase program, which the Board evaluates periodically. There is no established expiration date for the program. During the fourth quarter of 2019, we repurchased 1.6 million shares at an average price of $256.55 per share. As of December 31, 2019, we had Board authorization to purchase up to 72 million shares of our common stock.

22



PERFORMANCE GRAPH
The following performance graph compares the cumulative five-year total return to shareholders on our common stock relative to the cumulative total returns of the S&P 500 index, the S&P Health Care Index and the Dow Jones US Industrial Average Index for the five-year period ended December 31, 2019. The comparisons assume the investment of $100 on December 31, 2014 in our common stock and in each index, and that dividends were reinvested when paid.
PERFORMANCEGRAPH2019.JPG
 
12/14
 
12/15
 
12/16
 
12/17
 
12/18
 
12/19
UnitedHealth Group
$
100.00

 
$
118.26

 
$
163.68

 
$
228.86

 
$
262.09

 
$
314.47

S&P Health Care Index
100.00

 
106.89

 
104.01

 
126.98

 
135.19

 
163.34

Dow Jones US Industrial Average
100.00

 
100.21

 
116.74

 
149.56

 
144.35

 
180.94

S&P 500 Index
100.00

 
101.38

 
113.51

 
138.29

 
132.23

 
173.86

The stock price performance included in this graph is not necessarily indicative of future stock price performance.


23



ITEM 6.
SELECTED FINANCIAL DATA
 
 
For the Years Ended December 31,
(in millions, except percentages and per share data)
 
2019
 
2018
 
2017 (a)
 
2016
 
2015 (b)
Consolidated operating results
 
 
 
 
 
 
 
 
 
 
Revenues
 
$
242,155

 
$
226,247

 
$
201,159

 
$
184,840

 
$
157,107

Earnings from operations
 
19,685

 
17,344

 
15,209

 
12,930

 
11,021

Net earnings attributable to UnitedHealth Group common shareholders
 
13,839

 
11,986

 
10,558

 
7,017

 
5,813

Return on equity (c)
 
25.7
%
 
24.4
%
 
24.4
%
 
19.4
%
 
17.7
%
Basic earnings per share attributable to UnitedHealth Group common shareholders
 
$
14.55

 
$
12.45

 
$
10.95

 
$
7.37

 
$
6.10

Diluted earnings per share attributable to UnitedHealth Group common shareholders
 
14.33

 
12.19

 
10.72

 
7.25

 
6.01

Cash dividends declared per common share
 
4.14

 
3.45

 
2.875

 
2.375

 
1.875

 
 
 
 
 
 
 
 
 
 
 
Consolidated cash flows from (used for)
 
 
 
 
 
 
 
 
 
 
Operating activities
 
$
18,463

 
$
15,713

 
$
13,596

 
$
9,795

 
$
9,740

Investing activities
 
(12,699
)
 
(12,385
)
 
(8,599
)
 
(9,355
)
 
(18,395
)
Financing activities
 
(5,625
)
 
(4,365
)
 
(3,441
)
 
(1,011
)
 
12,239

 
 
 
 
 
 
 
 
 
 
 
Consolidated financial condition
 
 
 
 
 
 
 
 
 
 
(as of December 31)
 
 
 
 
 
 
 
 
 
 
Cash and investments
 
$
51,454

 
$
46,834

 
$
43,831

 
$
37,143

 
$
31,703

Total assets
 
173,889

 
152,221

 
139,058

 
122,810

 
111,254

Total commercial paper and long-term debt
 
40,678

 
36,554

 
31,692

 
32,970

 
31,965

Redeemable noncontrolling interests
 
1,726

 
1,908

 
2,189

 
2,012

 
1,736

Total equity
 
60,436

 
54,319

 
49,833

 
38,177

 
33,725

               
(a)
Includes the impact of the revaluation of our net deferred tax liabilities due to tax reform enacted in December 2017.
(b)
Includes the effects of the July 2015 acquisition of Catamaran Corporation (Catamaran) and related debt issuances.
(c)
Return on equity is calculated as net earnings attributable to UnitedHealth Group common shareholders divided by average shareholders’ equity. Average shareholders’ equity is calculated using the shareholders’ equity balance at the end of the preceding year and the shareholders’ equity balances at the end of each of the four quarters of the year presented.
This selected financial data should be read with the accompanying “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 and the Consolidated Financial Statements and Notes to the Consolidated Financial Statements included in Part II, Item 8, “Financial Statements and Supplementary Data.”

ITEM 7.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion should be read together with the accompanying Consolidated Financial Statements and Notes to the Consolidated Financial Statements thereto included in Item 8, “Financial Statements and Supplementary Data.” Readers are cautioned that the statements, estimates, projections or outlook contained in this report, including discussions regarding financial prospects, economic conditions, trends and uncertainties contained in this Item 7, may constitute forward-looking statements within the meaning of the PSLRA. These forward-looking statements involve risks and uncertainties that may cause our actual results to differ materially from the expectations expressed or implied in the forward-looking statements. A description of some of the risks and uncertainties can be found further below in this Item 7 and in Part I, Item 1A, “Risk Factors.”
Discussions of year-over-year comparisons between 2018 and 2017 that are not included in this Form 10-K can be found in Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” of the Company’s Form 10-K for the fiscal year ended December 31, 2018.

24



EXECUTIVE OVERVIEW
General
UnitedHealth Group is a diversified health care company dedicated to helping people live healthier lives and helping make the health system work better for everyone. Through our diversified businesses, we leverage core competencies in data analytics and health information; advanced technology; and clinical expertise. These core competencies are deployed within two distinct, but strategically aligned, business platforms: health benefits operating under UnitedHealthcare and health services operating under Optum.
We have four reportable segments across our two business platforms, UnitedHealthcare and Optum:
UnitedHealthcare, which includes UnitedHealthcare Employer & Individual, UnitedHealthcare Medicare & Retirement, UnitedHealthcare Community & State and UnitedHealthcare Global;
OptumHealth;
OptumInsight; and
OptumRx.
Further information on our business and reportable segments is presented in Part I, Item 1, “Business” and in Note 14 of Notes to the Consolidated Financial Statements included in Part II, Item 8, “Financial Statements and Supplementary Data.”
Business Trends
Our businesses participate in the United States, South America and certain other international health markets. In the United States, health care spending has grown consistently for many years and comprises 18% of gross domestic product (GDP). We expect overall spending on health care to continue to grow in the future, due to inflation, medical technology and pharmaceutical advancement, regulatory requirements, demographic trends in the population and national interest in health and well-being. The rate of market growth may be affected by a variety of factors, including macro-economic conditions and regulatory changes, which could impact our results of operations, including our continued efforts to control health care costs.
Pricing Trends. To price our health care benefit products, we start with our view of expected future costs. We frequently evaluate and adjust our approach in each of the local markets we serve, considering relevant factors, such as product positioning, price competitiveness and environmental, competitive, legislative and regulatory considerations, including minimum MLR thresholds. We will continue seeking to balance growth and profitability across all of these dimensions.
The commercial risk market remains highly competitive in both the small group and large group segments. We expect broad-based competition to continue as the industry adapts to individual and employer needs. The ACA, which includes three distinct taxes (ACA Tax), has an annual, nondeductible insurance industry tax (Health Insurance Industry Tax) to be levied proportionally across the insurance industry for risk-based health insurance products. A provision in the 2018 federal budget imposed a one year moratorium for 2019 on the collection of the Health Insurance Industry Tax. Pricing for contracts that cover some portion of calendar year 2020 reflect the return of the Health Insurance Industry Tax. The ACA Tax was permanently repealed by Congress, effective January 1, 2021.
Medicare Advantage funding continues to be pressured, as discussed below in “Regulatory Trends and Uncertainties.”
We expect Medicaid revenue growth due to anticipated changes in mix and increases in the number of people we serve; we also believe that the payment rate environment creates the risk of continued downward pressure on Medicaid margin percentages. We continue to take a prudent, market-sustainable posture for both new business and maintenance of existing relationships. We continue to advocate for actuarially sound rates that are commensurate with our medical cost trends and we remain dedicated to partnering with those states that are committed to the long-term viability of their programs.
Medical Cost Trends. Our medical cost trends primarily relate to changes in unit costs, health system utilization and prescription drug costs. We endeavor to mitigate those increases by engaging physicians and consumers with information and helping them make clinically sound choices, with the objective of helping them achieve high-quality, affordable care.
Delivery System and Payment Modernization. The health care market continues to change based on demographic shifts, new regulations, political forces and both payer and patient expectations. Health plans and care providers are being called upon to work together to close gaps in care and improve overall care quality, improve the health of populations and reduce costs. We continue to see a greater number of people enrolled in plans with underlying incentive-based care provider payment models that reward high-quality, affordable care and foster collaboration. We work together with clinicians to leverage our data and analytics to provide the necessary information to close gaps in care and improve overall health outcomes for patients.

25



We are increasingly rewarding care providers for delivering improvements in quality and cost-efficiency. As of December 31, 2019, we served over 17 million people through some form of aligned contractual arrangement, including full-risk, shared-risk and bundled episode-of-care and performance incentive payment approaches. As of December 31, 2019, our contracts with value-based elements totaled $79 billion in annual spending, including $20 billion through risk-transfer agreements.
This trend is creating needs for health management services that can coordinate care around the primary care physician, including new primary care channels, and for investments in new clinical and administrative information and management systems, which we believe provide growth opportunities for our Optum business platform.
Regulatory Trends and Uncertainties
Following is a summary of management’s view of the trends and uncertainties related to some of the key provisions of the ACA and other regulatory matters. For additional information regarding the ACA and regulatory trends and uncertainties, see Part I, Item 1 “Business - Government Regulation” and Item 1A, “Risk Factors.”
Medicare Advantage Rates. Final 2020 Medicare Advantage rates resulted in an increase in industry base rates of approximately 2.5%, short of the industry forward medical cost trend. This combined with the return of the Health Insurance Industry Tax creates continued pressure in the Medicare Advantage program.
The ongoing Medicare Advantage funding pressure places continued importance on effective medical management and ongoing improvements in administrative efficiency. There are a number of adjustments we have made to partially offset these rate pressures and reductions. In some years, these adjustments impact the majority of the seniors we serve through Medicare Advantage. For example, we seek to intensify our medical and operating cost management, make changes to the size and composition of our care provider networks, adjust members' benefits and implement or increase the member premiums that supplement the monthly payments we receive from the government. Additionally, we decide annually on a county-by-county basis where we will offer Medicare Advantage plans.
Our Medicare Advantage rates are currently enhanced by CMS quality bonuses in certain counties based on our local plans’ Star ratings. The level of Star ratings from CMS, based upon specified clinical and operational performance standards, will impact future quality bonuses.
ACA Tax. A provision in the 2019 Federal Budget imposed a one year moratorium for 2019 on the collection of the Health Insurance Industry Tax. In 2020, the industry-wide amount of the Health Insurance Industry Tax, which is primarily borne by customers, will be $15.5 billion and we expect our portion to be approximately $3.0 billion. The ACA Tax was repealed by Congress, effective January 1, 2021.
SELECTED OPERATING PERFORMANCE ITEMS
The following represents a summary of select 2019 year-over-year operating comparisons to 2018.
Consolidated revenues increased by 7%, UnitedHealthcare revenues increased 6% and Optum revenues grew 12%.
UnitedHealthcare served 575,000 additional people domestically as a result of growth in commercial business and services to seniors, partially offset by the proactive withdrawal from the Iowa medicaid market.
Earnings from operations increased by 13%, including increases of 13% at UnitedHealthcare and 14% at Optum.
Diluted earnings per common share increased 18% to $14.33.
Cash flows from operations were $18.5 billion, an increase of 18%.

26



RESULTS SUMMARY
The following table summarizes our consolidated results of operations and other financial information:
(in millions, except percentages and per share data)
 
For the Years Ended December 31,
 
Change
 
2019
 
2018
 
2017
 
2019 vs. 2018
Revenues:
 
 
 
 
 
 
 
 
 
 
Premiums
 
$
189,699

 
$
178,087

 
$
158,453

 
$
11,612

 
7
%
Products
 
31,597

 
29,601

 
26,366

 
1,996

 
7

Services
 
18,973

 
17,183

 
15,317

 
1,790

 
10

Investment and other income
 
1,886

 
1,376

 
1,023

 
510

 
37

Total revenues
 
242,155

 
226,247

 
201,159

 
15,908

 
7

Operating costs:
 
 
 
 
 
 
 
 
 
 
Medical costs
 
156,440

 
145,403

 
130,036

 
11,037

 
8

Operating costs
 
35,193

 
34,074

 
29,557

 
1,119

 
3

Cost of products sold
 
28,117

 
26,998

 
24,112

 
1,119

 
4

Depreciation and amortization
 
2,720

 
2,428

 
2,245

 
292

 
12

Total operating costs
 
222,470

 
208,903

 
185,950

 
13,567

 
6

Earnings from operations
 
19,685

 
17,344

 
15,209

 
2,341

 
13

Interest expense
 
(1,704
)
 
(1,400
)
 
(1,186
)
 
(304
)
 
22

Earnings before income taxes
 
17,981

 
15,944

 
14,023

 
2,037

 
13

Provision for income taxes
 
(3,742
)
 
(3,562
)
 
(3,200
)
 
(180
)
 
5

Net earnings
 
14,239

 
12,382

 
10,823

 
1,857

 
15

Earnings attributable to noncontrolling interests
 
(400
)
 
(396
)
 
(265
)
 
(4
)
 
1

Net earnings attributable to UnitedHealth Group common shareholders
 
$
13,839

 
$
11,986

 
$
10,558

 
$
1,853

 
15
%
Diluted earnings per share attributable to UnitedHealth Group common shareholders
 
$
14.33

 
$
12.19

 
$
10.72

 
$
2.14

 
18
%
Medical care ratio (a)
 
82.5
%
 
81.6
%
 
82.1
%
 
0.9
 %
 
 
Operating cost ratio
 
14.5

 
15.1

 
14.7

 
(0.6
)
 
 
Operating margin
 
8.1

 
7.7

 
7.6

 
0.4

 
 
Tax rate
 
20.8

 
22.3

 
22.8

 
(1.5
)
 
 
Net earnings margin (b)
 
5.7

 
5.3

 
5.2

 
0.4

 
 
Return on equity (c)
 
25.7
%
 
24.4
%
 
24.4
%
 
1.3
 %
 
 
               
(a)
Medical care ratio is calculated as medical costs divided by premium revenue.
(b)
Net earnings margin attributable to UnitedHealth Group shareholders.
(c)
Return on equity is calculated as net earnings attributable to UnitedHealth Group common shareholders divided by average shareholders’ equity. Average shareholders’ equity is calculated using the shareholders’ equity balance at the end of the preceding year and the shareholders’ equity balances at the end of each of the four quarters of the year presented.
2019 RESULTS OF OPERATIONS COMPARED TO 2018 RESULTS
Consolidated Financial Results
Revenue
The increase in revenue was primarily driven by the increase in the number of individuals served through Medicare Advantage; pricing trends; and organic and acquisition growth across the Optum business, primarily due to expansion in pharmacy care services and care delivery, partially offset by the moratorium of the Health Insurance Industry Tax in 2019.
Medical Costs and MCR
Medical costs increased due to growth in people served through Medicare Advantage and medical cost trends, partially offset by increased prior year favorable medical development. The MCR increased due to the revenue effects of the Health Insurance Industry Tax moratorium.

27


Reportable Segments
See Note 14 of Notes to the Consolidated Financial Statements included in Part II, Item 8, “Financial Statements and Supplementary Data” for more information on our segments. The following table presents a summary of the reportable segment financial information:
 
 
For the Years Ended December 31,
 
Change
(in millions, except percentages)
 
2019
 
2018
 
2017
 
2019 vs. 2018
Revenues
 
 
 
 
 
 
 
 
 
 
UnitedHealthcare
 
$
193,842

 
$
183,476

 
$
163,257

 
$
10,366

 
6
%
OptumHealth
 
30,317

 
24,145

 
20,570

 
6,172

 
26

OptumInsight
 
10,006

 
9,008

 
8,087

 
998

 
11

OptumRx
 
74,288

 
69,536

 
63,755

 
4,752

 
7

Optum eliminations
 
(1,661
)
 
(1,409
)
 
(1,227
)
 
(252
)
 
18

Optum
 
112,950

 
101,280

 
91,185

 
11,670

 
12

Eliminations
 
(64,637
)
 
(58,509
)
 
(53,283
)
 
(6,128
)
 
10

Consolidated revenues
 
$
242,155

 
$
226,247

 
$
201,159

 
$
15,908

 
7
%
Earnings from operations
 
 
 
 
 
 
 
 
 
 
UnitedHealthcare
 
$
10,326

 
$
9,113

 
$
8,498

 
$
1,213

 
13
%
OptumHealth
 
2,963

 
2,430

 
1,823

 
533

 
22

OptumInsight
 
2,494

 
2,243

 
1,770

 
251

 
11

OptumRx
 
3,902

 
3,558

 
3,118

 
344

 
10

Optum
 
9,359

 
8,231

 
6,711

 
1,128

 
14

Consolidated earnings from operations
 
$
19,685

 
$
17,344

 
$
15,209

 
$
2,341

 
13
%
Operating margin
 
 
 
 
 
 
 
 
 
 
UnitedHealthcare
 
5.3
%
 
5.0
%
 
5.2
%
 
0.3
 %
 
 
OptumHealth
 
9.8

 
10.1

 
8.9

 
(0.3
)
 
 
OptumInsight
 
24.9

 
24.9

 
21.9

 

 
 
OptumRx
 
5.3

 
5.1

 
4.9

 
0.2

 
 
Optum
 
8.3

 
8.1

 
7.4

 
0.2

 
 
Consolidated operating margin
 
8.1
%
 
7.7
%
 
7.6
%
 
0.4
 %
 
 
UnitedHealthcare
The following table summarizes UnitedHealthcare revenues by business:
 
 
For the Years Ended December 31,
 
Change
(in millions, except percentages)
 
2019
 
2018
 
2017
 
2019 vs. 2018
UnitedHealthcare Employer & Individual
 
$
56,945

 
$
54,761

 
$
52,066

 
$
2,184

 
4
%
UnitedHealthcare Medicare & Retirement
 
83,252

 
75,473

 
65,995

 
7,779

 
10

UnitedHealthcare Community & State
 
43,790

 
43,426

 
37,443

 
364

 
1

UnitedHealthcare Global
 
9,855

 
9,816

 
7,753

 
39

 

Total UnitedHealthcare revenues
 
$
193,842

 
$
183,476

 
$
163,257

 
$
10,366

 
6
%

28


The following table summarizes the number of individuals served by our UnitedHealthcare businesses, by major market segment and funding arrangement:
 
 
December 31,
 
Change
(in thousands, except percentages)
 
2019
 
2018
 
2017
 
2019 vs. 2018
Commercial:
 
 
 
 
 
 
 
 
 
 
Risk-based
 
8,575

 
8,495

 
8,420

 
80

 
1
 %
Fee-based
 
19,185

 
18,420

 
18,595

 
765

 
4

Fee-based TRICARE
 

 

 
2,850

 

 

Total commercial
 
27,760

 
26,915

 
29,865

 
845

 
3

Medicare Advantage
 
5,270

 
4,945

 
4,430

 
325

 
7

Medicaid
 
5,900

 
6,450

 
6,705

 
(550
)
 
(9
)
Medicare Supplement (Standardized)
 
4,500

 
4,545

 
4,445

 
(45
)
 
(1
)
Total public and senior
 
15,670

 
15,940

 
15,580

 
(270
)
 
(2
)
Total UnitedHealthcare - domestic medical
 
43,430

 
42,855

 
45,445

 
575

 
1

International
 
5,720

 
6,220

 
4,080

 
(500
)
 
(8
)
Total UnitedHealthcare - medical
 
49,150

 
49,075

 
49,525

 
75

 
 %
Supplemental Data:
 
 
 
 
 
 
 
 
 
 
Medicare Part D stand-alone
 
4,405

 
4,710

 
4,940

 
(305
)
 
(6
)%
Fee-based commercial group business increased primarily due to an acquisition. Medicare Advantage increased due to the growth in people served through individual and employer-sponsored group Medicare Advantage plans. The decrease in people served through Medicaid was primarily driven by the proactive withdrawal from the Iowa market as well as by states adding new carriers to existing programs and managing eligibility, partially offset by increases in Dual Special Needs Plans. The decrease in people served internationally is a result of our continued affordability efforts and underwriting discipline.
UnitedHealthcare’s revenue and earnings from operations increased due to growth in the number of individuals served through Commercial and Medicare Advantage, including a greater mix of people with a higher acuity needs. Revenue increases were partially offset by the moratorium on the Health Insurance Industry Tax in 2019. Earnings from operations were also favorably impacted by operating cost management.
Optum
Total revenues and earnings from operations increased as each segment reported increased revenues and earnings from operations as a result of the factors discussed below. Earnings from operations also increased due to productivity and overall cost management initiatives.
The results by segment were as follows:
OptumHealth
Revenue increased at OptumHealth primarily due to organic growth and acquisitions in care delivery, increased care services and organic growth in behavioral health services. Earnings from operations increased primarily due to care delivery. OptumHealth served approximately 96 million and 93 million people as of December 31, 2019 and 2018, respectively.
OptumInsight
Revenue and earnings from operations at OptumInsight increased primarily due to organic and acquisition growth in managed services.
OptumRx
Revenue at OptumRx increased primarily due to organic growth and acquisitions in specialty pharmacy, partially offset by an expected large client transition. Earnings from operations increased primarily due to the factors that increased revenue as well as improved supply chain management. OptumRx fulfilled 1,340 million and 1,343 million adjusted scripts in 2019 and 2018, respectively, with 2019 impacted by the large client transition.



29


LIQUIDITY, FINANCIAL CONDITION AND CAPITAL RESOURCES
Liquidity
Introduction
We manage our liquidity and financial position in the context of our overall business strategy. We continually forecast and manage our cash, investments, working capital balances and capital structure to meet the short-term and long-term obligations of our businesses while seeking to maintain liquidity and financial flexibility. Cash flows generated from operating activities are principally from earnings before noncash expenses.
Our regulated subsidiaries generate significant cash flows from operations and are subject to, among other things, minimal levels of statutory capital, as defined by their respective jurisdiction, and restrictions on the timing and amount of dividends paid to their parent companies.
Our U.S. regulated subsidiaries paid their parent companies dividends of $5.6 billion and $3.7 billion in 2019 and 2018, respectively. See Note 10 of Notes to the Consolidated Financial Statements included in Part II, Item 8, “Financial Statements and Supplementary Data” for further detail concerning our regulated subsidiary dividends.
Our nonregulated businesses also generate significant cash flows from operations that are available for general corporate use. Cash flows generated by these entities, combined with dividends from our regulated entities and financing through the issuance of long-term debt as well as issuance of commercial paper or the ability to draw under our committed credit facilities, further strengthen our operating and financial flexibility. We use these cash flows to expand our businesses through acquisitions, reinvest in our businesses through capital expenditures, repay debt and return capital to our shareholders through dividends and repurchases of our common stock.
Summary of our Major Sources and Uses of Cash and Cash Equivalents
 
 
For the Years Ended December 31,
 
Change
(in millions)
 
2019
 
2018
 
2017
 
2019 vs. 2018
Sources of cash:
 
 
 
 
 
 
 
 
Cash provided by operating activities
 
$
18,463

 
$
15,713

 
$
13,596

 
$
2,750

Issuances of long-term debt and commercial paper, net of repayments
 
3,994

 
4,134

 

 
(140
)
Proceeds from common share issuances
 
1,037

 
838

 
688

 
199

Customer funds administered
 
13

 

 
3,172

 
13

Other
 
219

 

 

 
219

Total sources of cash
 
23,726

 
20,685

 
17,456

 
 
Uses of cash:
 
 
 
 
 
 
 
 
Cash paid for acquisitions, net of cash assumed
 
(8,343
)
 
(5,997
)
 
(2,131
)
 
(2,346
)
Cash dividends paid
 
(3,932
)
 
(3,320
)
 
(2,773
)
 
(612
)
Common share repurchases
 
(5,500
)
 
(4,500
)
 
(1,500
)
 
(1,000
)
Repayments of long-term debt and commercial paper, net of issuances
 

 

 
(2,615
)
 

Purchases of property, equipment and capitalized software
 
(2,071
)
 
(2,063
)
 
(2,023
)
 
(8
)
Purchases of investments, net of sales and maturities
 
(2,504
)
 
(4,099
)
 
(4,319
)
 
1,595

Other
 
(1,237
)
 
(1,743
)
 
(539
)
 
506

Total uses of cash
 
(23,587
)
 
(21,722
)
 
(15,900
)
 
 
Effect of exchange rate changes on cash and cash equivalents
 
(20
)
 
(78
)
 
(5
)
 
58

Net increase (decrease) in cash and cash equivalents
 
$
119

 
$
(1,115
)
 
$
1,551

 
$
1,234


30


2019 Cash Flows Compared to 2018 Cash Flows
Increased cash flows provided by operating activities were primarily driven by higher net earnings as well as changes in working capital accounts. Other significant changes in sources or uses of cash year-over-year included an increase in cash paid for acquisitions, increased share repurchases and decreased net purchases of investments.
Financial Condition
As of December 31, 2019, our cash, cash equivalent, available-for-sale debt securities and equity securities balances of $49.1 billion included $11.0 billion of cash and cash equivalents (of which $584 million was available for general corporate use), $36.1 billion of debt securities and $2.0 billion of investments in equity securities. Given the significant portion of our portfolio held in cash equivalents, we do not anticipate fluctuations in the aggregate fair value of our financial assets to have a material impact on our liquidity or capital position. Other sources of liquidity, primarily from operating cash flows and our commercial paper program, which is supported by our bank credit facilities, reduce the need to sell investments during adverse market conditions. See Note 4 of Notes to the Consolidated Financial Statements included in Part II, Item 8, “Financial Statements and Supplementary Data” for further detail concerning our fair value measurements.
Our available-for-sale debt portfolio had a weighted-average duration of 3.4 years and a weighted-average credit rating of “Double A” as of December 31, 2019. When multiple credit ratings are available for an individual security, the average of the available ratings is used to determine the weighted-average credit rating.
Capital Resources and Uses of Liquidity
In addition to cash flows from operations and cash and cash equivalent balances available for general corporate use, our capital resources and uses of liquidity are as follows:
Commercial Paper and Bank Credit Facilities. Our revolving bank credit facilities provide liquidity support for our commercial paper borrowing program, which facilitates the private placement of senior unsecured debt through independent broker-dealers, and are available for general corporate purposes. For more information on our commercial paper and bank credit facilities, see Note 8 of Notes to the Consolidated Financial Statements included in Part II, Item 8, “Financial Statements and Supplementary Data.”
Our revolving bank credit facilities contain various covenants, including covenants requiring us to maintain a defined debt to debt-plus-shareholders’ equity ratio of not more than 60%, subject to increase in certain circumstances set forth in the applicable credit agreement. As of December 31, 2019, our debt to debt-plus-shareholders’ equity ratio, as defined and calculated under the credit facilities, was 39%.
Long-Term Debt. Periodically, we access capital markets to issue long-term debt for general corporate purposes, such as, to meet our working capital requirements, to refinance debt, to finance acquisitions or for share repurchases. For more information on our debt, see Note 8 of Notes to the Consolidated Financial Statements included in Part II, Item 8 “Financial Statements and Supplementary Data.”
Credit Ratings. Our credit ratings as of December 31, 2019 were as follows:
  
Moody’s
 
S&P Global
 
Fitch
 
A.M. Best
 
Ratings
 
Outlook
 
Ratings
 
Outlook
 
Ratings
 
Outlook
 
Ratings
 
Outlook
Senior unsecured debt
A3
 
Stable
 
A+
 
Stable
 
A-
 
Stable
 
A-
 
Positive
Commercial paper
P-2
 
n/a
 
A-1
 
n/a
 
F1
 
n/a
 
AMB-1
 
n/a
The availability of financing in the form of debt or equity is influenced by many factors, including our profitability, operating cash flows, debt levels, credit ratings, debt covenants and other contractual restrictions, regulatory requirements and economic and market conditions. A significant downgrade in our credit ratings or adverse conditions in the capital markets may increase the cost of borrowing for us or limit our access to capital.
Share Repurchase Program. As of December 31, 2019, we had Board authorization to purchase up to 72 million shares of our common stock. For more information on our share repurchase program, see Note 10 of Notes to the Consolidated Financial Statements included in Part II, Item 8, “Financial Statements and Supplementary Data.”
Dividends. In June 2019, the Company’s Board of Directors increased the Company’s quarterly cash dividend to shareholders to an annual rate of $4.32 compared to $3.60 per share. For more information on our dividend, see Note 10 of Notes to the Consolidated Financial Statements included in Part II, Item 8, “Financial Statements and Supplementary Data.”

31


CONTRACTUAL OBLIGATIONS AND COMMITMENTS
The following table summarizes future obligations due by period as of December 31, 2019, under our various contractual obligations and commitments:
(in millions)
 
2020
 
2021 to 2022
 
2023 to 2024
 
Thereafter
 
Total
Debt (a)
 
$
5,532

 
$
9,118

 
$
6,122

 
$
44,302

 
$
65,074

Operating leases
 
804

 
1,327

 
901

 
1,671

 
4,703

Purchase and other obligations (b)
 
1,617

 
2,483

 
768

 
248

 
5,116

Other liabilities (c)
 
914

 
344

 
285

 
7,767

 
9,310

Redeemable noncontrolling interests (d)
 
852

 
542

 

 
332

 
1,726

Total contractual obligations
 
$
9,719

 
$
13,814

 
$
8,076

 
$
54,320

 
$
85,929

               
(a)
Includes interest coupon payments and maturities at par or put values. The table also assumes amounts are outstanding through their contractual term. See Note 8 of Notes to the Consolidated Financial Statements included in Part II, Item 8, “Financial Statements and Supplementary Data” for more detail.
(b)
Includes fixed or minimum commitments under existing purchase obligations for goods and services, including agreements that are cancelable with the payment of an early termination penalty and remaining capital commitments for venture capital funds and other funding commitments. Excludes agreements that are cancelable without penalty and excludes liabilities to the extent recorded in our Consolidated Balance Sheets as of December 31, 2019.
(c)
Includes obligations associated with contingent consideration and payments related to business acquisitions, certain employee benefit programs, amounts accrued for guaranty fund assessments, unrecognized tax benefits, and various long-term liabilities. Due to uncertainty regarding payment timing, obligations for employee benefit programs, charitable contributions, future settlements, unrecognized tax benefits and other liabilities have been classified as “Thereafter.”
(d)
Includes commitments for redeemable shares of our subsidiaries. When the timing of the redemption is indeterminable, the commitment has been classified as “Thereafter.”
We do not have other significant contractual obligations or commitments that require cash resources. However, we continually evaluate opportunities to expand our operations, which include internal development of new products, programs and technology applications and may include acquisitions.
OFF-BALANCE SHEET ARRANGEMENTS
As of December 31, 2019, we were not involved in any off-balance sheet arrangements, which have or are reasonably likely to have a material effect on our financial condition, results of operations or liquidity.
RECENTLY ISSUED ACCOUNTING STANDARDS
CRITICAL ACCOUNTING ESTIMATES
Critical accounting estimates are those estimates that require management to make challenging, subjective or complex judgments, often because they must estimate the effects of matters that are inherently uncertain and may change in subsequent periods. Critical accounting estimates involve judgments and uncertainties that are sufficiently sensitive and may result in materially different results under different assumptions and conditions.
Medical Costs Payable
Medical costs and medical costs payable include estimates of our obligations for medical care services that have been rendered on behalf of insured consumers, but for which claims have either not yet been received or processed. Depending on the health care professional and type of service, the typical billing lag for services can be up to 90 days from the date of service. Approximately 90% of claims related to medical care services are known and settled within 90 days from the date of service and substantially all within twelve months. As of December 31, 2019, our days outstanding in medical payables was 51 days, calculated as total medical payables divided by total medical costs times the number of days in the period.
In each reporting period, our operating results include the effects of more completely developed medical costs payable estimates associated with previously reported periods. If the revised estimate of prior period medical costs is less than the previous estimate, we will decrease reported medical costs in the current period (favorable development). If the revised estimate of prior period medical costs is more than the previous estimate, we will increase reported medical costs in the current

32


period (unfavorable development). Medical costs in 2019, 2018 and 2017 included favorable medical cost development related to prior years of $580 million, $320 million and $690 million, respectively.
In developing our medical costs payable estimates, we apply different estimation methods depending on the month for which incurred claims are being estimated. For example, for the most recent two months, we estimate claim costs incurred by applying observed medical cost trend factors to the average per member per month (PMPM) medical costs incurred in prior months for which more complete claim data is available, supplemented by a review of near-term completion factors.
Completion Factors. A completion factor is an actuarial estimate, based upon historical experience and analysis of current trends, of the percentage of incurred claims during a given period that have been adjudicated by us at the date of estimation. Completion factors are the most significant factors we use in developing our medical costs payable estimates for periods prior to the most recent two months. Completion factors include judgments in relation to claim submissions such as the time from date of service to claim receipt, claim levels and processing cycles, as well as other factors. If actual claims submission rates from providers (which can be influenced by a number of factors, including provider mix and electronic versus manual submissions) or our claim processing patterns are different than estimated, our reserve estimates may be significantly impacted.
The following table illustrates the sensitivity of these factors and the estimated potential impact on our medical costs payable estimates for those periods as of December 31, 2019:  
Completion Factors
(Decrease) Increase in Factors
 
Increase (Decrease)
In Medical Costs Payable
 
 
(in millions)
(0.75)%
 
$
584

(0.50)
 
388

(0.25)
 
194

0.25
 
(193
)
0.50
 
(384
)
0.75
 
(575
)
Medical Cost Per Member Per Month Trend Factors. Medical cost PMPM trend factors are significant factors we use in developing our medical costs payable estimates for the most recent two months. Medical cost trend factors are developed through a comprehensive analysis of claims incurred in prior months, provider contracting and expected unit costs, benefit design and a review of a broad set of health care utilization indicators, including but not limited to, pharmacy utilization trends, inpatient hospital authorization data and influenza incidence data from the National Centers for Disease Control. We also consider macroeconomic variables such as GDP growth, employment and disposable income. A large number of factors can cause the medical cost trend to vary from our estimates, including: our ability and practices to manage medical and pharmaceutical costs, changes in level and mix of services utilized, mix of benefits offered, including the impact of co-pays and deductibles, changes in medical practices, catastrophes and epidemics.
The following table illustrates the sensitivity of these factors and the estimated potential impact on our medical costs payable estimates for the most recent two months as of December 31, 2019:
Medical Cost PMPM Quarterly Trend
Increase (Decrease) in Factors
 
Increase (Decrease)
In Medical Costs Payable
 
 
(in millions)
3%
 
$
754

2
 
502

1
 
251

(1)
 
(251
)
(2)
 
(502
)
(3)
 
(754
)
The completion factors and medical costs PMPM trend factors analyses above include outcomes that are considered reasonably likely based on our historical experience estimating liabilities for incurred but not reported benefit claims.
Management believes the amount of medical costs payable is reasonable and adequate to cover our liability for unpaid claims as of December 31, 2019; however, actual claim payments may differ from established estimates as discussed above. Assuming a hypothetical 1% difference between our December 31, 2019 estimates of medical costs payable and actual medical costs

33


payable, excluding AARP Medicare Supplement Insurance and any potential offsetting impact from premium rebates, 2019 net earnings would have increased or decreased by approximately $160 million.
Goodwill
We evaluate goodwill for impairment annually or more frequently when an event occurs or circumstances change that indicate the carrying value may not be recoverable. When testing goodwill for impairment, we may first assess qualitative factors to determine if it is more likely than not that the carrying value of a reporting unit exceeds its estimated fair value. During a qualitative analysis, we consider the impact of changes, if any, to the following factors: macroeconomic, industry and market factors, cost factors, changes in overall financial performance, and any other relevant events and uncertainties impacting a reporting unit. If our qualitative assessment indicates that goodwill impairment is more likely than not, we perform additional quantitative analyses. We may also elect to skip the qualitative testing and proceed directly to the quantitative testing. For reporting units where a quantitative analysis is performed, we perform a multi-step test measuring the fair values of the reporting units and comparing them to their aggregate carrying values, including goodwill. If the fair value is less than the carrying value of the reporting unit, then the implied value of goodwill would be calculated and compared to the carrying amount of goodwill to determine whether goodwill is impaired.
We estimate the fair values of our reporting units using discounted cash flows, which include assumptions about a wide variety of internal and external factors. Significant assumptions used in the impairment analysis include financial projections of free cash flow (including significant assumptions about operations, capital requirements and income taxes), long-term growth rates for determining terminal value beyond the discretely forecasted periods and discount rates. For each reporting unit, comparative market multiples are used to corroborate the results of our discounted cash flow test.
Forecasts and long-term growth rates used for our reporting units are consistent with, and use inputs from, our internal long-term business plan and strategies. Key assumptions used in these forecasts include:
Revenue trends. Key revenue drivers for each reporting unit are determined and assessed. Significant factors include: customer and/or membership growth, medical trends and the impact and expectations of regulatory environments. Additional macro-economic assumptions relating to unemployment, GDP growth, interest rates and inflation are also evaluated and incorporated, as appropriate.
Medical cost trends. For further discussion of medical cost trends, see the “Medical Cost Trend” section of Executive Overview-Business Trends and the “Medical Costs Payable” critical accounting estimate above. Similar factors, including historical and expected medical cost trend levels, are considered in estimating our long-term medical trends at the reporting unit level.
Operating productivity. We forecast expected operating cost levels based on historical levels and expectations of future operating cost levels.
Capital levels. The operating and long-term capital requirements for each business are considered.
Discount rates are determined for each reporting unit and include consideration of the implied risk inherent in their forecasts. Our most significant estimate in the discount rate determinations involves our adjustments to the peer company weighted average costs of capital that reflect reporting unit-specific factors. We have not made any adjustments to decrease a discount rate below the calculated peer company weighted average cost of capital for any reporting unit. Company-specific adjustments to discount rates are subjective and thus are difficult to measure with certainty. The passage of time and the availability of additional information regarding areas of uncertainty with respect to the reporting units’ operations could cause these assumptions to change in the future. As of October 1, 2019, we completed our annual impairment tests for goodwill with all of our reporting units having fair values substantially in excess of their carrying values.
LEGAL MATTERS
CONCENTRATIONS OF CREDIT RISK
Investments in financial instruments such as marketable securities and accounts receivable may subject us to concentrations of credit risk. Our investments in marketable securities are managed under an investment policy authorized by our Board of Directors. This policy limits the amounts that may be invested in any one issuer and generally limits our investments to U.S. government and agency securities, state and municipal securities and corporate debt obligations that are investment grade.

34


Concentrations of credit risk with respect to accounts receivable are limited due to the large number of employer groups and other customers that constitute our client base. As of December 31, 2019, there were no significant concentrations of credit risk.
ITEM 7A.
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Our primary market risks are exposures to changes in interest rates that impact our investment income and interest expense and the fair value of certain of our fixed-rate investments and debt, as well as foreign currency exchange rate risk of the U.S. dollar primarily to the Brazilian real and Chilean peso.
As of December 31, 2019, we had $14 billion of financial assets on which the interest rates received vary with market interest rates, which may significantly impact our investment income. Also as of December 31, 2019, $9 billion of our financial liabilities, which include commercial paper, debt and deposit liabilities, were at interest rates that vary with market rates, either directly or through the use of related interest rate swap contracts.
The fair value of our fixed-rate investments and debt also varies with market interest rates. As of December 31, 2019, $33 billion of our investments were fixed-rate debt securities and $39 billion of our debt was non-swapped fixed-rate term debt. An increase in market interest rates decreases the market value of fixed-rate investments and fixed-rate debt. Conversely, a decrease in market interest rates increases the market value of fixed-rate investments and fixed-rate debt.
We manage exposure to market interest rates by diversifying investments across different fixed-income market sectors and debt across maturities, as well as by endeavoring to match our floating-rate assets and liabilities over time, either directly or through the use of interest rate swap contracts. Unrealized gains and losses on investments in available-for-sale debt securities are reported in comprehensive income.
The following tables summarize the impact of hypothetical changes in market interest rates across the entire yield curve by 1% point or 2% points as of December 31, 2019 and 2018 on our investment income and interest expense per annum and the fair value of our investments and debt (in millions, except percentages):
 
 
December 31, 2019
Increase (Decrease) in Market Interest Rate
 
Investment
Income Per
Annum
 
Interest
Expense Per
Annum
 
Fair Value of
Financial Assets (a)
 
Fair Value of
Financial Liabilities
2 %
 
$
282

 
$
185

 
$
(2,668
)
 
$
(6,813
)
1
 
141

 
93

 
(1,331
)
 
(3,704
)
(1)
 
(141
)
 
(93
)
 
1,246

 
4,433

(2)
 
(282
)
 
(185
)
 
2,071

 
9,613

 
 
December 31, 2018
Increase (Decrease) in Market Interest Rate
 
Investment
Income Per
Annum
 
Interest
Expense Per
Annum
 
Fair Value of
Financial Assets (a)
 
Fair Value of
Financial Liabilities
2%
 
$
276

 
$
189

 
$
(2,242
)
 
$
(5,017
)
1
 
138

 
94

 
(1,140
)
 
(2,724
)
(1)
 
(138
)
 
(94
)
 
1,118

 
3,155

(2)
 
(276
)
 
(189
)
 
2,196

 
6,953

               
(a)
As of December 31, 2019 and 2018, some of our investments had interest rates below 2% so the assumed hypothetical change in the fair value of investments does not reflect the full 200 basis point reduction.
We have an exposure to changes in the value of foreign currencies, primarily the Brazilian real and the Chilean peso, to the U.S. dollar in translation of UnitedHealthcare Global’s operating results at the average exchange rate over the accounting period, and UnitedHealthcare Global’s assets and liabilities at the exchange rate at the end of the accounting period. The gains or losses resulting from translating foreign assets and liabilities into U.S. dollars are included in equity and comprehensive income.
An appreciation of the U.S. dollar against the Brazilian real or Chilean peso reduces the carrying value of the net assets denominated in those currencies. For example, as of December 31, 2019, a hypothetical 10% and 25% increase in the value of the U.S. dollar against those currencies would have caused a reduction in net assets of approximately $600 million and $1.3 billion, respectively. We manage exposure to foreign currency earnings risk primarily by conducting our international business operations in their functional currencies.
As of December 31, 2019, we had $2.0 billion of investments in equity securities, primarily consisting of investments in non-U.S. dollar fixed-income funds; employee savings plan related investments; and dividend paying stocks. Valuations in non-U.S. dollar funds are subject to foreign exchange rates. 

35



ITEM 8.
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
 
Page
 
 
37
39
40
41
42
43
44
44
44
50
52
54
54
55
57
58
60
61
63
64
64
67


36



REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the shareholders and the Board of Directors of UnitedHealth Group Incorporated and Subsidiaries:
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of UnitedHealth Group Incorporated and subsidiaries (the "Company") as of December 31, 2019 and 2018, the related consolidated statements of operations, comprehensive income, changes in equity and cash flows for each of the three years in the period ended December 31, 2019, and the related notes (collectively referred to as the "financial statements"). In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2019 and 2018, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2019, in conformity with accounting principles generally accepted in the United States of America.
We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of December 31, 2019, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission, and our report dated February 14, 2020 expressed an unqualified opinion on the Company’s internal control over financial reporting.
Basis for Opinion
These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
Critical Audit Matters
The critical audit matters communicated below are matters arising from the current-period audit of the financial statements that were communicated or required to be communicated to the audit committee and that (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.
Incurred but not Reported (IBNR) Claim Liability - Refer to Notes 2 and 7 to the financial statements.
Critical Audit Matter Description
Medical costs payable includes estimates of the Company’s obligations for medical care services rendered on behalf of insured consumers, for which claims have either not yet been received or processed. These estimates are referred to as incurred but not reported (IBNR) claim liabilities. The Company develops IBNR estimates using an actuarial model that requires management to exercise certain judgments in developing its estimates. Judgments made by management include the time from date of service to claim receipt, the impact of claim levels and processing cycles, as well as other factors.
We identified the IBNR claim liability as a critical audit matter because of the significant assumptions made by management in estimating the liability. This required complex auditor judgment, and an increased extent of effort, including the involvement of actuarial specialists in performing procedures to evaluate the reasonableness of management’s methods, assumptions and judgments in developing the liability.


37


How the Critical Audit Matter Was Addressed in the Audit
Our audit procedures included the following, among others:
We tested the effectiveness of controls over management’s estimate of the IBNR claim liability balance, including controls over the judgments of time from date of service to claim receipt, and the impact of claim levels and processing cycles.
We tested the underlying claims and membership data and other information that served as the basis for the actuarial analysis, to test that the inputs to the actuarial estimate were complete and accurate.
With the assistance of actuarial specialists, we evaluated the reasonableness of the actuarial methods and assumptions used by management to estimate the IBNR claim liability by:
Performing an overlay of the historical claims data used in management’s current year model to the data used in prior periods to validate that there were no material changes to the claims data tested in prior periods.
Developing an independent estimate of the IBNR claim liability and comparing our estimate to management’s estimate.
Performing a retrospective review comparing management’s prior year assumptions of the estimate of IBNR to claims processed in 2019 with dates of service in 2018 or prior.
Goodwill - Refer to Notes 2 and 6 to the financial statements.
Critical Audit Matter Description
At December 31, 2019, the Company’s goodwill balance was $66 billion. As discussed in Note 2 of the financial statements, goodwill is tested for impairment for certain of the Company’s reporting units, at least annually, by comparing the carrying values of the reporting units to the estimated fair values as of the impairment testing date. The estimates of the reporting unit fair values are calculated using discounted cash flows, which include financial projections including significant assumptions about revenue trends, medical cost trends, and operating costs as well as discount rates. Comparative market multiples are used to corroborate the results of the discounted cash flow test. The fair values of the reporting units exceeded the carrying values as of the impairment testing date, therefore no impairment was recognized.
We identified certain reporting units as a critical audit matter because of the significant assumptions made by management to estimate the fair value of the reporting unit. This required increased auditor judgment and extent of effort, including involvement of fair value specialists to evaluate the reasonableness of management’s estimates and assumptions related to financial projections, which can be impacted by regulatory and macro-economic factors.
How the Critical Audit Matter Was Addressed in the Audit
Our audit procedures related to the valuation and business assumptions including the discount rate and financial forecasts used by management to estimate the fair value of certain reporting units included the following, among others:
We tested the effectiveness of controls over management’s annual goodwill impairment assessment, including those over the determination of the fair value such as controls related to management’s financial forecasts, as well as controls over the selection of discount rates and company specific risks.
We evaluated management’s ability to forecast and meet future revenue, medical cost trend, and operating costs by comparing:
Actual results to historical forecasts.
Forecasted information to: internal communications to management and the Board of Directors, industry and economic trends, and analyst reports of revenue and earnings expectations for the Company and its peers.
We evaluated the impact of changes in management’s forecasts from the October 1, 2019 annual measurement date to December 31, 2019.
With the assistance of our fair value specialists, we evaluated the reasonableness of the (1) valuation methodology, including testing the mathematical accuracy of the calculation and (2) discount rate and company specific risks by:
Testing the source information underlying the determination of the discount rate and the mathematical accuracy of the calculation.
Developing a range of independent discount rate estimates and comparing to those selected by management.
 
/S/ DELOITTE & TOUCHE LLP
 
Minneapolis, Minnesota
February 14, 2020
We have served as the Company's auditor since 2002.

38


UnitedHealth Group
Consolidated Balance Sheets
(in millions, except per share data)
 
December 31,
2019
 
December 31,
2018
Assets
 
 
 
 
Current assets:
 
 
 
 
Cash and cash equivalents
 
$
10,985

 
$
10,866

Short-term investments
 
3,260

 
3,458

Accounts receivable, net of allowances of $519 and $712
 
11,822

 
11,388

Other current receivables, net of allowances of $859 and $502
 
9,640

 
6,862

Assets under management
 
3,076

 
3,032

Prepaid expenses and other current assets
 
3,851

 
3,086

Total current assets
 
42,634

 
38,692

Long-term investments
 
37,209

 
32,510

Property, equipment and capitalized software, net of accumulated depreciation and amortization of $4,995 and $4,141
 
8,704

 
8,458

Goodwill
 
65,659

 
58,910

Other intangible assets, net of accumulated amortization of $5,072 and $4,592
 
10,349

 
9,325

Other assets
 
9,334

 
4,326

Total assets
 
$
173,889

 
$
152,221

Liabilities, redeemable noncontrolling interests and equity
 
 
 
 
Current liabilities:
 
 
 
 
Medical costs payable
 
$
21,690

 
$
19,891

Accounts payable and accrued liabilities
 
19,005

 
16,705

Commercial paper and current maturities of long-term debt
 
3,870

 
1,973

Unearned revenues
 
2,622

 
2,396

Other current liabilities
 
14,595

 
12,244

Total current liabilities
 
61,782

 
53,209

Long-term debt, less current maturities
 
36,808

 
34,581

Deferred income taxes
 
2,993

 
2,474

Other liabilities
 
10,144

 
5,730

Total liabilities
 
111,727

 
95,994

 
 
 


Redeemable noncontrolling interests
 
1,726

 
1,908

Equity:
 
 
 
 
Preferred stock, $0.001 par value - 10 shares authorized; no shares issued or outstanding
 

 

Common stock, $0.01 par value - 3,000 shares authorized; 948 and 960 issued and outstanding
 
9

 
10

Additional paid-in capital
 
7

 

Retained earnings
 
61,178

 
55,846

Accumulated other comprehensive loss
 
(3,578
)
 
(4,160
)
Nonredeemable noncontrolling interests
 
2,820

 
2,623

Total equity
 
60,436

 
54,319

Total liabilities, redeemable noncontrolling interests and equity
 
$
173,889

 
$
152,221


See Notes to the Consolidated Financial Statements


39



UnitedHealth Group
Consolidated Statements of Operations
 
 
For the Years Ended December 31,
(in millions, except per share data)
 
2019
 
2018
 
2017
Revenues:
 
 
 
 
 
 
Premiums
 
$
189,699

 
$
178,087

 
$
158,453

Products
 
31,597

 
29,601

 
26,366

Services
 
18,973

 
17,183

 
15,317

Investment and other income
 
1,886

 
1,376

 
1,023

Total revenues
 
242,155

 
226,247

 
201,159

Operating costs:
 
 
 
 
 
 
Medical costs
 
156,440

 
145,403

 
130,036

Operating costs
 
35,193

 
34,074

 
29,557

Cost of products sold
 
28,117

 
26,998

 
24,112

Depreciation and amortization
 
2,720

 
2,428

 
2,245

Total operating costs
 
222,470

 
208,903

 
185,950

Earnings from operations
 
19,685

 
17,344

 
15,209

Interest expense
 
(1,704
)
 
(1,400
)
 
(1,186
)
Earnings before income taxes
 
17,981

 
15,944

 
14,023

Provision for income taxes
 
(3,742
)
 
(3,562
)
 
(3,200
)
Net earnings
 
14,239

 
12,382

 
10,823

Earnings attributable to noncontrolling interests
 
(400
)
 
(396
)
 
(265
)
Net earnings attributable to UnitedHealth Group common shareholders
 
$
13,839

 
$
11,986

 
$
10,558

Earnings per share attributable to UnitedHealth Group common shareholders:
 
 
 
 
 
 
Basic
 
$
14.55

 
$
12.45

 
$
10.95

Diluted
 
$
14.33

 
$
12.19

 
$
10.72

Basic weighted-average number of common shares outstanding
 
951

 
963

 
964

Dilutive effect of common share equivalents
 
15

 
20

 
21

Diluted weighted-average number of common shares outstanding
 
966

 
983

 
985

Anti-dilutive shares excluded from the calculation of dilutive effect of common share equivalents
 
10

 
6

 
5


See Notes to the Consolidated Financial Statements

40




UnitedHealth Group
Consolidated Statements of Comprehensive Income

 
 
For the Years Ended December 31,
(in millions)
 
2019
 
2018
 
2017
Net earnings
 
$
14,239

 
$
12,382

 
$
10,823

Other comprehensive income (loss):
 
 
 
 
 
 
Gross unrealized gains (losses) on investment securities during the period
 
1,212

 
(294
)
 
209

Income tax effect
 
(279
)
 
67

 
(72
)
Total unrealized gains (losses), net of tax
 
933

 
(227
)
 
137

Gross reclassification adjustment for net realized gains included in net earnings
 
(104
)
 
(62
)
 
(83
)
Income tax effect
 
24

 
14

 
30

Total reclassification adjustment, net of tax
 
(80
)
 
(48
)
 
(53
)
Total foreign currency translation losses
 
(271
)
 
(1,242
)
 
(70
)
Other comprehensive income (loss)
 
582

 
(1,517
)
 
14

Comprehensive income
 
14,821

 
10,865

 
10,837

Comprehensive income attributable to noncontrolling interests
 
(400
)
 
(396
)
 
(265
)
Comprehensive income attributable to UnitedHealth Group common shareholders
 
$
14,421

 
$
10,469

 
$
10,572


See Notes to the Consolidated Financial Statements

41



UnitedHealth Group
Consolidated Statements of Changes in Equity
 
 
Common Stock
 
Additional Paid-In Capital
 
Retained Earnings
 
Accumulated Other Comprehensive (Loss) Income
 
Nonredeemable
Noncontrolling
Interests
 
Total
Equity
(in millions)
 
Shares
 
Amount
 
 
 
Net Unrealized (Losses) Gains on Investments
 
Foreign Currency Translation Losses
 
 
Balance at January 1, 2017
 
952

 
$
10

 
$

 
$
40,945

 
$
(97
)
 
$
(2,584
)
 
$
(97
)
 
$
38,177

Net earnings
 
 
 
 
 
 
 
10,558

 
 
 
 
 
194

 
10,752

Other comprehensive income (loss)
 
 
 
 
 
 
 
 
 
84

 
(70
)
 
 
 
14

Issuances of common stock, and related tax effects
 
26

 

 
2,225

 
 
 
 
 
 
 
 
 
2,225

Share-based compensation
 
 
 
 
 
582

 
 
 
 
 
 
 
 
 
582

Common share repurchases
 
(9
)
 

 
(1,500
)
 
 
 
 
 
 
 
 
 
(1,500
)
Cash dividends paid on common shares ($2.875 per share)
 
 
 
 
 
 
 
(2,773
)
 
 
 
 
 
 
 
(2,773
)
Acquisition of redeemable noncontrolling interest shares
 
 
 
 
 
283

 
 
 
 
 
 
 
 
 
283

Redeemable noncontrolling interest fair value and other adjustments
 
 
 
 
 
113

 
 
 
 
 
 
 
 
 
113

Acquisition and other adjustments of nonredeemable noncontrolling interests
 
 
 
 
 
 
 
 
 
 
 
 
 
2,112

 
2,112

Distributions to nonredeemable noncontrolling interest
 
 
 
 
 
 
 
 
 
 
 
 
 
(152
)
 
(152
)
Balance at December 31, 2017
 
969

 
10

 
1,703

 
48,730

 
(13
)
 
(2,654
)
 
2,057

 
49,833

Adjustment to adopt ASU 2016-01
 
 
 
 
 
 
 
(24
)
 
24

 
 
 
 
 

Net earnings
 
 
 
 
 
 
 
11,986

 
 
 
 
 
273

 
12,259

Other comprehensive loss
 
 
 
 
 
 
 
 
 
(275
)
 
(1,242
)
 
 
 
(1,517
)
Issuances of common stock, and related tax effects
 
10

 

 
814

 
 
 
 
 
 
 
 
 
814

Share-based compensation
 
 
 
 
 
620

 
 
 
 
 
 
 
 
 
620

Common share repurchases
 
(19
)
 

 
(2,974
)
 
(1,526
)
 
 
 
 
 
 
 
(4,500
)
Cash dividends paid on common shares ($3.45 per share)
 
 
 
 
 
 
 
(3,320
)
 
 
 
 
 
 
 
(3,320
)
Redeemable noncontrolling interest fair value and other adjustments
 
 
 
 
 
(163
)
 
 
 
 
 
 
 
 
 
(163
)
Acquisition and other adjustments of nonredeemable noncontrolling interests
 
 
 
 
 
 
 
 
 
 
 
 
 
521

 
521

Distributions to nonredeemable noncontrolling interest
 
 
 
 
 
 
 
 
 
 
 
 
 
(228
)
 
(228
)
Balance at December 31, 2018
 
960

 
10

 

 
55,846

 
(264
)
 
(3,896
)
 
2,623

 
54,319

Adjustment to adopt ASU 2016-02
 
 
 
 
 
 
 
(13
)
 
 
 
 
 
(5
)
 
(18
)
Net earnings
 
 
 
 
 
 
 
13,839

 
 
 
 
 
285

 
14,124

Other comprehensive income (loss)
 
 
 
 
 
 
 
 
 
853

 
(271
)
 
 
 
582

Issuances of common stock, and related tax effects
 
10

 

 
696

 
 
 
 
 
 
 
 
 
696

Share-based compensation
 
 
 
 
 
673

 
 
 
 
 
 
 
 
 
673

Common share repurchases
 
(22
)
 
(1
)
 
(937
)
 
(4,562
)
 
 
 
 
 
 
 
(5,500
)
Cash dividends paid on common shares ($4.14 per share)
 
 
 
 
 
 
 
(3,932
)
 
 
 
 
 
 
 
(3,932
)
Redeemable noncontrolling interests fair value and other adjustments
 
 
 
 
 
(316
)
 
 
 
 
 
 
 
 
 
(316
)
Acquisition and other adjustments of nonredeemable noncontrolling interests
 
 
 
 
 
(109
)
 
 
 
 
 
 
 
196

 
87

Distributions to nonredeemable noncontrolling interests
 
 
 
 
 
 
 
 
 
 
 
 
 
(279
)
 
(279
)
Balance at December 31, 2019
 
948

 
$
9

 
$
7

 
$
61,178

 
$
589

 
$
(4,167
)
 
$
2,820

 
$
60,436

See Notes to the Consolidated Financial Statements

42


UnitedHealth Group
Consolidated Statements of Cash Flows
 
 
For the Years Ended December 31,
(in millions)
 
2019
 
2018
 
2017
Operating activities
 
 
 
 
 
 
Net earnings
 
$
14,239

 
$
12,382

 
$
10,823

Noncash items:
 
 
 
 
 
 
Depreciation and amortization
 
2,720

 
2,428

 
2,245

Deferred income taxes
 
230

 
42

 
(965
)
Share-based compensation
 
697

 
638

 
597

Other, net
 
(106
)
 
(71
)
 
217

Net change in other operating items, net of effects from acquisitions and changes in AARP balances:
 
 
 
 
 
 
Accounts receivable
 
162

 
(1,351
)
 
(1,062
)
Other assets
 
(1,563
)
 
(750
)
 
(630
)
Medical costs payable
 
1,221

 
1,831

 
1,284

Accounts payable and other liabilities
 
733

 
526

 
930

Unearned revenues
 
130

 
38

 
157

Cash flows from operating activities
 
18,463

 
15,713

 
13,596

Investing activities
 
 
 
 
 
 
Purchases of investments
 
(18,131
)
 
(14,010
)
 
(14,588
)
Sales of investments
 
8,536

 
3,641

 
4,623

Maturities of investments
 
7,091

 
6,270

 
5,646

Cash paid for acquisitions, net of cash assumed
 
(8,343
)
 
(5,997
)
 
(2,131
)
Purchases of property, equipment and capitalized software
 
(2,071
)
 
(2,063
)
 
(2,023
)
Other, net
 
219

 
(226
)
 
(126
)
Cash flows used for investing activities
 
(12,699
)
 
(12,385
)
 
(8,599
)
Financing activities
 
 
 
 
 
 
Common share repurchases
 
(5,500
)
 
(4,500
)
 
(1,500
)
Cash dividends paid
 
(3,932
)
 
(3,320
)
 
(2,773
)
Proceeds from common stock issuances
 
1,037

 
838

 
688

Repayments of long-term debt
 
(1,750
)
 
(2,600
)
 
(4,398
)
Proceeds from (repayments of) commercial paper, net
 
300

 
(201
)
 
(3,508
)
Proceeds from issuance of long-term debt
 
5,444

 
6,935

 
5,291

Customer funds administered
 
13

 
(131
)
 
3,172

Other, net
 
(1,237
)
 
(1,386
)
 
(413
)
Cash flows used for financing activities
 
(5,625
)
 
(4,365
)
 
(3,441
)
Effect of exchange rate changes on cash and cash equivalents
 
(20
)
 
(78
)
 
(5
)
Increase (decrease) in cash and cash equivalents
 
119

 
(1,115
)
 
1,551

Cash and cash equivalents, beginning of period
 
10,866

 
11,981

 
10,430

Cash and cash equivalents, end of period
 
$
10,985

 
$
10,866

 
$
11,981

 
 
 
 
 
 
 
Supplemental cash flow disclosures
 
 
 
 
 
 
Cash paid for interest
 
$
1,627

 
$
1,410

 
$
1,133

Cash paid for income taxes
 
3,542

 
3,257

 
4,004

Supplemental schedule of non-cash investing activities
 
 
 
 
 
 
Common stock issued for acquisitions
 
$

 
$

 
$
2,164



43


UnitedHealth Group
Notes to the Consolidated Financial Statements
1.
Description of Business
UnitedHealth Group Incorporated (individually and together with its subsidiaries, “UnitedHealth Group” and “the Company”) is a diversified health care company dedicated to helping people live healthier lives and helping make the health system work better for everyone.
Through its diversified family of businesses, the Company leverages core competencies in data and health information; advanced technology; and clinical expertise. These core competencies are deployed within two distinct, but strategically aligned, business platforms: health benefits operating under UnitedHealthcare and health services operating under Optum.
2.
Basis of Presentation, Use of Estimates and Significant Accounting Policies
Basis of Presentation
The Company has prepared the Consolidated Financial Statements according to U.S. Generally Accepted Accounting Principles (GAAP) and has included the accounts of UnitedHealth Group and its subsidiaries.
Use of Estimates
These Consolidated Financial Statements include certain amounts based on the Company’s best estimates and judgments. The Company’s most significant estimates relate to estimates and judgments for medical costs payable and revenues, valuation and impairment analysis of goodwill and other intangible assets and estimates of other current liabilities and other current receivables. Certain of these estimates require the application of complex assumptions and judgments, often because they involve matters that are inherently uncertain and will likely change in subsequent periods. The impact of any change in estimates is included in earnings in the period in which the estimate is adjusted.
Revenues
Premiums
Premium revenues are primarily derived from risk-based health insurance arrangements in which the premium is typically at a fixed rate per individual served for a one-year period, and the Company assumes the economic risk of funding its customers’ health care and related administrative costs.
Premium revenues are recognized in the period in which eligible individuals are entitled to receive health care benefits. Health care premium payments received from the Company’s customers in advance of the service period are recorded as unearned revenues. Fully insured commercial products of U.S. health plans, Medicare Advantage and Medicare Prescription Drug Benefit (Medicare Part D) plans with medical loss ratios as calculated under the definitions in the Patient Protection and Affordable Care Act (ACA) and related federal and state regulations and implementing regulation, that fall below certain targets are required to rebate ratable portions of their premiums annually. Medicare Advantage premium revenue includes the impact of the Centers for Medicare & Medicaid Services (CMS) quality bonuses based on plans’ Star ratings.
Premium revenues are recognized based on the estimated premiums earned, net of projected rebates, because the Company is able to reasonably estimate the ultimate premiums of these contracts. The Company also records premium revenues from capitation arrangements at its OptumHealth businesses.
The Company’s Medicare Advantage and Medicare Part D premium revenues are subject to periodic adjustment under CMS’ risk adjustment payment methodology. CMS deploys a risk adjustment model that apportions premiums paid to all health plans according to health severity and certain demographic factors. The CMS risk adjustment model provides higher per member payments for enrollees diagnosed with certain conditions and lower payments for enrollees who are healthier. Under this risk adjustment methodology, CMS calculates the risk adjusted premium payment using diagnosis and encounter data from hospital inpatient, hospital outpatient and physician treatment settings. The Company and health care providers collect, capture and submit the necessary and available data to CMS within prescribed deadlines. The Company estimates risk adjustment premium revenues based upon the data submitted and expected to be submitted to CMS. Risk adjustment data for the Company’s plans are subject to review by the government, including audit by regulators. See Note 12 for additional information regarding these audits.
Products and Services
For the Company’s OptumRx pharmacy care services business, the majority of revenues are derived from products sold through a contracted network of retail pharmacies or home delivery, specialty and community health pharmacies. Product

44


revenues include ingredient costs (net of rebates), a negotiated dispensing fee and customer co-payments for drugs dispensed through the Company’s home delivery, specialty and community pharmacies. In retail pharmacy transactions, revenues recognized exclude the member’s applicable co-payment. Pharmacy products are billed to customers based on the number of transactions occurring during the billing period. Product revenues are recognized when the prescriptions are dispensed. The Company has entered into contracts in which it is primarily obligated to pay its network pharmacy providers for benefits provided to their customers regardless of whether the Company is paid. The Company is also involved in establishing the prices charged by retail pharmacies, determining which drugs will be included in formulary listings and selecting which retail pharmacies will be included in the network offered to plan sponsors’ members and accordingly, are reported on a gross basis.
Services revenue consists of fees derived from services performed for customers that self-insure the health care costs of their employees and employees’ dependents. Under service fee contracts, the Company receives monthly, a fixed fee per employee, which is recognized as revenue as the Company performs, or makes available, the applicable services to the customer. The customers retain the risk of financing health care costs for their employees and employees’ dependents, and the Company administers the payment of customer funds to physicians and other health care professionals from customer-funded bank accounts. As the Company has neither the obligation for funding the health care costs, nor the primary responsibility for providing the medical care, the Company does not recognize premium revenue and medical costs for these contracts in its Consolidated Financial Statements. For these fee-based customer arrangements, the Company provides coordination and facilitation of medical services; transaction processing; customer, consumer and care professional services; and access to contracted networks of physicians, hospitals and other health care professionals. These services are performed throughout the contract period.
Revenues are also comprised of a number of services and products sold through Optum. OptumHealth’s service revenues include net patient service revenues that are recorded based upon established billing rates, less allowances for contractual adjustments, and are recognized as services are provided. For its financial services offerings, OptumHealth charges fees and earns investment income on managed funds. OptumInsight provides software and information products, advisory consulting arrangements and managed services outsourcing contracts, which may be delivered over several years. OptumInsight revenues are generally recognized over time and measured each period based on the progress to date as services are performed or made available to customers.
As of December 31, 2019 and 2018, accounts receivables related to products and services were $4.3 billion and $3.9 billion, respectively. In 2019 and 2018, the Company had no material bad-debt expense and there were no material contract assets, contract liabilities or deferred contract costs recorded on the Consolidated Balance Sheets as of December 31, 2019 or 2018.
For the years ended December 31, 2019 and 2018, revenue recognized from performance obligations related to prior periods (for example, due to changes in transaction price) was not material.
Revenue expected to be recognized in any future year related to remaining performance obligations, excluding revenue pertaining to contracts that have an original expected duration of one year or less, contracts where revenue is recognized as invoiced and contracts with variable consideration related to undelivered performance obligations, is not material.
See Note 14 for disaggregation of revenue by segment and type.
Medical Costs and Medical Costs Payable
The Company’s estimate of medical costs payable represents management’s best estimate of its liability for unpaid medical costs as of December 31, 2019.
Each period, the Company re-examines previously established medical costs payable estimates based on actual claim submissions and other changes in facts and circumstances. As more complete claim information becomes available, the Company adjusts the amount of the estimates and includes the changes in estimates in medical costs in the period in which the change is identified. Approximately 90% of claims related to medical care services are known and settled within 90 days from the date of service and substantially all within twelve months.
Medical costs and medical costs payable include estimates of the Company’s obligations for medical care services that have been rendered on behalf of insured consumers, but for which claims have either not yet been received, processed, or paid. The Company develops estimates for medical care services incurred but not reported (IBNR), which includes estimates for claims that have not been received or fully processed, using an actuarial process that is consistently applied, centrally controlled and automated. The actuarial models consider factors such as time from date of service to claim processing, seasonal variances in medical care consumption, health care professional contract rate changes, medical care utilization and other medical cost trends, membership volume and demographics, the introduction of new technologies, benefit plan changes, and business mix changes related to products, customers and geography.

45


In developing its medical costs payable estimates, the Company applies different estimation methods depending on which incurred claims are being estimated. For the most recent two months, the Company estimates claim costs incurred by applying observed medical cost trend factors to the average per member per month (PMPM) medical costs incurred in prior months for which more complete claim data are available, supplemented by a review of near-term completion factors (actuarial estimates, based upon historical experience and analysis of current trends, of the percentage of incurred claims during a given period that have been adjudicated by the Company at the date of estimation). For months prior to the most recent two months, the Company applies the completion factors to actual claims adjudicated-to-date to estimate the expected amount of ultimate incurred claims for those months.
Cost of Products Sold
The Company’s cost of products sold includes the cost of pharmaceuticals dispensed to unaffiliated customers either directly at its home delivery and specialty pharmacy locations, or indirectly through its nationwide network of participating pharmacies. Rebates attributable to non-affiliated clients are accrued as rebates receivable and a reduction of cost of products sold, with a corresponding payable for the amounts of the rebates to be remitted to those non-affiliated clients in accordance with their contracts and recorded in the Consolidated Statements of Operations as a reduction of product revenue. Cost of products sold also includes the cost of personnel to support the Company’s transaction processing services, system sales, maintenance and professional services.
Cash, Cash Equivalents and Investments
Cash and cash equivalents are highly liquid investments that have an original maturity of three months or less. The fair value of cash and cash equivalents approximates their carrying value because of the short maturity of the instruments.
Investments with maturities of less than one year are classified as short-term. Because of regulatory requirements, certain investments are included in long-term investments regardless of their maturity date. The Company classifies these investments as held-to-maturity and reports them at amortized cost. Substantially all other investments are classified as available-for-sale and reported at fair value based on quoted market prices, where available. Equity investments, with certain exceptions, are measured at fair value with changes in fair value recognized in net earnings.
The Company excludes unrealized gains and losses on investments in available-for-sale debt securities from net earnings and reports them as comprehensive income and, net of income tax effects, as a separate component of equity. To calculate realized gains and losses on the sale of debt securities, the Company specifically identifies the cost of each investment sold.
The Company evaluates an investment for impairment by considering the length of time and extent to which market value has been less than cost or amortized cost, the financial condition and near-term prospects of the issuer as well as specific events or circumstances that may influence the operations of the issuer and the Company’s intent to sell the security or the likelihood that it will be required to sell the security before recovery of the entire amortized cost.
New information and the passage of time can change these judgments. The Company manages its investment portfolio to limit its exposure to any one issuer or market sector, and largely limits its investments to investment grade quality. Securities downgraded below policy minimums after purchase will be disposed of in accordance with the Company’s investment policy.
Assets Under Management
The Company provides health insurance products and services to members of AARP under a Supplemental Health Insurance Program (the AARP Program) and to AARP members and non-members under separate Medicare Advantage and Medicare Part D arrangements. The products and services under the AARP Program include supplemental Medicare benefits, hospital indemnity insurance, including insurance for individuals between 50 to 64 years of age, and other related products.
Pursuant to the Company’s agreement with AARP, program assets are managed separately from the Company’s general investment portfolio and are used to pay costs associated with the AARP Program. These assets are invested at the Company’s discretion, within investment guidelines approved by AARP. The Company does not guarantee any rates of return on these investments and, upon any transfer of the AARP Program contract to another entity, the Company would transfer cash equal in amount to the fair value of these investments at the date of transfer to that entity. Because the purpose of these assets is to fund the medical costs payable, the rate stabilization fund (RSF) liabilities and other related liabilities associated with this AARP contract, assets under management are classified as current assets, consistent with the classification of these liabilities.
The effects of changes in other balance sheet amounts associated with the AARP Program also accrue to the overall benefit of the AARP policyholders through the RSF balance. Accordingly, the Company excludes the effect of such changes in its Consolidated Statements of Cash Flows.

46


Other Current Receivables
Other current receivables include amounts due from pharmaceutical manufacturers for rebates and Medicare Part D drug discounts, accrued interest and other miscellaneous amounts due to the Company.
The Company’s pharmacy care services businesses contract with pharmaceutical manufacturers, some of which provide rebates based on use of the manufacturers’ products by its affiliated and non-affiliated clients. The Company accrues rebates as they are earned by its clients on a monthly basis based on the terms of the applicable contracts, historical data and current estimates. The pharmacy care services businesses bill these rebates to the manufacturers on a monthly or quarterly basis depending on the contractual terms and record rebates attributable to affiliated clients as a reduction to medical costs. The Company generally receives rebates two to five months after billing. As of December 31, 2019 and 2018, total pharmaceutical manufacturer rebates receivable included in other receivables in the Consolidated Balance Sheets amounted to $4.7 billion and $4.2 billion, respectively.
As of December 31, 2019 and 2018, the Company’s Medicare Part D receivables amounted to $2.3 billion and $0.8 billion, respectively.
Property, Equipment and Capitalized Software
Property, equipment and capitalized software are stated at cost, net of accumulated depreciation and amortization. Capitalized software consists of certain costs incurred in the development of internal-use software, including external direct costs of materials and services and applicable payroll costs of employees devoted to specific software development.
The Company calculates depreciation and amortization using the straight-line method over the estimated useful lives of the assets. The useful lives for property, equipment and capitalized software are:
Furniture, fixtures and equipment
3 to 10 years
Buildings
35 to 40 years
Capitalized software
3 to 5 years

Leasehold improvements are depreciated over the shorter of the remaining lease term or their estimated useful economic life.
Operating Leases
The Company leases facilities and equipment under long-term operating leases that are non-cancelable and expire on various dates. At the lease commencement date, lease right-of-use (ROU) assets and lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term, which includes all fixed obligations arising from the lease contract. If an interest rate is not implicit in a lease, the Company utilizes its incremental borrowing rate for a period that closely matches the lease term.
The Company’s ROU assets are included in other assets, and lease liabilities are included in other current liabilities and other liabilities in the Company’s Consolidated Balance Sheet.
Goodwill
To determine whether goodwill is impaired, annually or more frequently if needed, the Company performs a multi-step impairment test. The Company may first assess qualitative factors to determine if it is more likely than not that the carrying value of a reporting unit exceeds its estimated fair value. The Company may also elect to skip the qualitative testing and proceed directly to the quantitative testing. When performing quantitative testing, the Company first estimates the fair values of its reporting units using discounted cash flows. To determine fair values, the Company must make assumptions about a wide variety of internal and external factors. Significant assumptions used in the impairment analysis include financial projections of free cash flow (including significant assumptions about operations, capital requirements and income taxes), long-term growth rates for determining terminal value and discount rates. Comparative market multiples are used to corroborate the results of the discounted cash flow test. If the fair value is less than the carrying value of the reporting unit, then the implied value of goodwill would be calculated and compared to the carrying amount of goodwill to determine whether goodwill is impaired.
There was no impairment of goodwill during the year ended December 31, 2019.
Intangible Assets
The Company’s intangible assets are subject to impairment tests when events or circumstances indicate that an intangible asset (or asset group) may be impaired. The Company’s indefinite-lived intangible assets are also tested for impairment annually. There was no impairment of intangible assets during the year ended December 31, 2019.

47


Other Current Liabilities
Other current liabilities include health savings account deposits ($8.3 billion and $7.5 billion as of December 31, 2019 and 2018, respectively), deposits under the Medicare Part D program ($0.5 billion as of December 31, 2019 and 2018), the RSF associated with the AARP Program, accruals for premium rebate payments under the ACA, the current portion of future policy benefits and customer balances.
Policy Acquisition Costs
The Company’s short duration health insurance contracts typically have a one-year term and may be canceled by the customer with at least 30 days’ notice. Costs related to the acquisition and renewal of short duration customer contracts are primarily charged to expense as incurred.
Redeemable Noncontrolling Interests
Redeemable noncontrolling interests in the Company’s subsidiaries whose redemption is outside the control of the Company are classified as temporary equity. The following table provides details of the Company's redeemable noncontrolling interests’ activity for the years ended December 31, 2019 and 2018:
(in millions)
 
2019
 
2018
Redeemable noncontrolling interests, beginning of period
 
$
1,908

 
$
2,189

Net earnings
 
115

 
123

Acquisitions
 
90

 
102

Redemptions
 
(618
)
 
(90
)
Distributions
 
(69
)
 
(53
)
Fair value and other adjustments
 
300

 
(363
)
Redeemable noncontrolling interests, end of period
 
$
1,726

 
$
1,908


Share-Based Compensation
The Company recognizes compensation expense for share-based awards, including stock options and restricted stock and restricted stock units (collectively, restricted shares), on a straight-line basis over the related service period (generally the vesting period) of the award, or to an employee’s eligible retirement date under the award agreement, if earlier. Restricted shares vest ratably, primarily over two to four years and compensation expense related to restricted shares is based on the share price on the date of grant. Stock options vest ratably primarily over four years and may be exercised up to 10 years from the date of grant. Compensation expense related to stock options is based on the fair value at the date of grant, which is estimated on the date of grant using a binomial option-pricing model. Under the Company’s Employee Stock Purchase Plan (ESPP), eligible employees are allowed to purchase the Company’s stock at a discounted price, which is 85% of the lower market price of the Company’s common stock at the beginning or at the end of the six-month purchase period. Share-based compensation expense for all programs is recognized in operating costs in the Consolidated Statements of Operations.
Net Earnings Per Common Share
The Company computes basic earnings per common share attributable to UnitedHealth Group common shareholders by dividing net earnings attributable to UnitedHealth Group common shareholders by the weighted-average number of common shares outstanding during the period. The Company determines diluted net earnings per common share attributable to UnitedHealth Group common shareholders using the weighted-average number of common shares outstanding during the period, adjusted for potentially dilutive shares associated with stock options, restricted shares and the ESPP (collectively, common stock equivalents), using the treasury stock method. The treasury stock method assumes a hypothetical issuance of shares to settle the share-based awards, with the assumed proceeds used to purchase common stock at the average market price for the period. Assumed proceeds include the amount the employee must pay upon exercise and the average unrecognized compensation cost. The difference between the number of shares assumed issued and number of shares assumed purchased represents the dilutive shares.
Health Insurance Industry Tax
The ACA includes an annual, nondeductible insurance industry tax (Health Insurance Industry Tax) to be levied proportionally across the insurance industry for risk-based health insurance products. A one year moratorium on the collection of the Health Insurance Industry Tax occurred in 2019. The Health Insurance Industry Tax will be levied in 2020, however, it was permanently repealed by Congress for subsequent years.

48


The Company estimates its liability for the Health Insurance Industry Tax based on a ratio of the Company’s applicable net premiums written compared to the U.S. health insurance industry total applicable net premiums, both for the previous calendar year. The Company records in full the estimated liability for the Health Insurance Industry Tax at the beginning of the calendar year with a corresponding deferred cost that is amortized to operating costs on the Consolidated Statements of Operations using a straight-line method over the calendar year. The liability is recorded in accounts payable and accrued liabilities and the corresponding deferred cost is recorded in prepaid expenses and other current assets on the Consolidated Balance Sheets.
Recently Issued Accounting Standards
In June 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standard Update (ASU) No. 2016-13, “Financial Instruments - Credit Losses (Topic 326)” (ASU 2016-13). ASU 2016-13 requires the use of the current expected credit loss impairment model to develop an estimate of expected credit losses for certain financial assets. ASU 2016-13 also requires expected credit losses on available-for-sale debt securities to be recognized through an allowance for credit losses and revises certain disclosure requirements. The Company adopted ASU 2016-13 using a cumulative effect upon adoption approach on January 1, 2020. The adoption resulted in no material impact to the Company’s balance sheet, results of operations, equity or cash flows.
Recently Adopted Accounting Standards
In February 2016, the FASB issued ASU No. 2016-02, “Leases (Topic 842)” as modified by ASUs 2018-01, 2018-10, 2018-11, 2018-20 and 2019-01 (collectively, ASU 2016-02). Under ASU 2016-02, an entity is required to recognize assets and liabilities for the rights and obligations created by leases on the entity’s balance sheet for both finance and operating leases. The Company adopted ASU 2016-02 using a cumulative-effect upon adoption approach as of January 1, 2019. Upon adoption, the Company recognized $3.3 billion of ROU assets and lease liabilities for operating leases on its Consolidated Balance Sheet, of which, $668 million were classified as current liabilities. The adoption of ASU 2016-02 was immaterial to the Company’s consolidated results of operations, equity and cash flows. The Company has included the disclosures required by ASU 2016-02 above and in Note 12.
The Company has determined that there have been no other recently adopted or issued accounting standards that had, or will have, a material impact on its Consolidated Financial Statements.

49


3.
Investments
A summary of debt securities by major security type is as follows:
(in millions)
 
Amortized
Cost
 
Gross
Unrealized
Gains
 
Gross
Unrealized
Losses
 
Fair
Value
December 31, 2019
 
 
 
 
 
 
 
 
Debt securities - available-for-sale:
 
 
 
 
 
 
 
 
U.S. government and agency obligations
 
$
3,502

 
$
55

 
$
(4
)
 
$
3,553

State and municipal obligations
 
5,680

 
251

 
(5
)
 
5,926

Corporate obligations
 
17,910

 
343

 
(11
)
 
18,242

U.S. agency mortgage-backed securities
 
6,425

 
109

 
(6
)
 
6,528

Non-U.S. agency mortgage-backed securities
 
1,811

 
37

 
(3
)
 
1,845

Total debt securities - available-for-sale
 
35,328

 
795

 
(29
)
 
36,094

Debt securities - held-to-maturity:
 
 
 
 
 
 
 
 
U.S. government and agency obligations
 
402

 
2

 

 
404

State and municipal obligations
 
32

 
2

 

 
34

Corporate obligations
 
538

 

 
(1
)
 
537

Total debt securities - held-to-maturity
 
972

 
4

 
(1
)
 
975

Total debt securities
 
$
36,300

 
$
799

 
$
(30
)
 
$
37,069

December 31, 2018
 
 
 
 
 
 
 
 
Debt securities - available-for-sale:
 
 
 
 
 
 
 
 
U.S. government and agency obligations
 
$
3,434

 
$
13

 
$
(42
)
 
$
3,405

State and municipal obligations
 
7,117

 
61

 
(57
)
 
7,121

Corporate obligations
 
15,366

 
14

 
(218
)
 
15,162

U.S. agency mortgage-backed securities
 
4,947

 
11

 
(106
)
 
4,852

Non-U.S. agency mortgage-backed securities
 
1,376

 
2

 
(20
)
 
1,358

Total debt securities - available-for-sale
 
32,240

 
101

 
(443
)
 
31,898

Debt securities - held-to-maturity:
 
 
 
 
 
 
 
 
U.S. government and agency obligations
 
255

 
1

 
(2
)
 
254

State and municipal obligations
 
11

 

 

 
11

Corporate obligations
 
355

 

 

 
355

Total debt securities - held-to-maturity
 
621

 
1

 
(2
)
 
620

Total debt securities
 
$
32,861

 
$
102

 
$
(445
)
 
$
32,518


Nearly all of the Company’s investments in mortgage-backed securities were rated AAA as of December 31, 2019.
The Company held $2.0 billion of equity securities as of December 31, 2019 and December 31, 2018. The Company’s investments in equity securities primarily consist of employee savings plan related investments, shares of Brazilian real denominated fixed-income funds and dividend paying stocks with readily determinable fair values. Additionally, the Company’s investments included $1.4 billion and $1.5 billion of equity method investments in operating businesses in the health care sector, as of December 31, 2019 and 2018, respectively.

50


The amortized cost and fair value of debt securities as of December 31, 2019, by contractual maturity, were as follows:
 
 
Available-for-Sale
 
Held-to-Maturity
(in millions)
 
Amortized
Cost
 
Fair
Value
 
Amortized
Cost
 
Fair
Value
Due in one year or less
 
$
3,382

 
$
3,388

 
$
314

 
$
314

Due after one year through five years
 
11,966

 
12,159

 
391

 
392

Due after five years through ten years
 
8,307

 
8,643

 
144

 
144

Due after ten years
 
3,437

 
3,531

 
123

 
125

U.S. agency mortgage-backed securities
 
6,425

 
6,528

 

 

Non-U.S. agency mortgage-backed securities
 
1,811

 
1,845

 

 

Total debt securities
 
$
35,328

 
$
36,094

 
$
972

 
$
975



The fair value of available-for-sale debt securities with gross unrealized losses by major security type and length of time that individual securities have been in a continuous unrealized loss position were as follows:
 
 
Less Than 12 Months
 
12 Months or Greater
 
 Total
(in millions)
 
Fair
Value
 
Gross
Unrealized
Losses
 
Fair
Value
 
Gross
Unrealized
Losses
 
Fair
Value
 
Gross
Unrealized
Losses
December 31, 2019
 
 
 
 
 
 
 
 
 
 
 
 
U.S. government and agency obligations
 
$
616

 
$
(4
)
 
$

 
$

 
$
616

 
$
(4
)
State and municipal obligations
 
440

 
(5
)
 

 

 
440

 
(5
)
Corporate obligations
 
1,903

 
(7
)
 
740

 
(4
)
 
2,643

 
(11
)
U.S. agency mortgage-backed securities
 
657

 
(3
)
 
333

 
(3
)
 
990

 
(6
)
Non-U.S. agency mortgage-backed securities
 
406

 
(3
)
 

 

 
406

 
(3
)
Total debt securities - available-for-sale
 
$
4,022

 
$
(22
)
 
$
1,073

 
$
(7
)
 
$
5,095

 
$
(29
)
December 31, 2018
 
 
 
 
 
 
 
 
 
 
 
 
U.S. government and agency obligations
 
$
998

 
$
(7
)
 
$
1,425

 
$
(35
)
 
$
2,423

 
$
(42
)
State and municipal obligations
 
1,334

 
(11
)
 
2,491

 
(46
)
 
3,825

 
(57
)
Corporate obligations
 
8,105

 
(109
)
 
4,239

 
(109
)
 
12,344

 
(218
)
U.S. agency mortgage-backed securities
 
1,296

 
(22
)
 
2,388

 
(84
)
 
3,684

 
(106
)
Non-U.S. agency mortgage-backed securities
 
622

 
(7
)
 
459

 
(13
)
 
1,081

 
(20
)
Total debt securities - available-for-sale
 
$
12,355

 
$
(156
)
 
$
11,002

 
$
(287
)
 
$
23,357

 
$
(443
)

The Company’s unrealized losses from all securities as of December 31, 2019 were generated from approximately 3,000 positions out of a total of 31,000 positions. The Company believes that it will collect the principal and interest due on its debt securities that have an amortized cost in excess of fair value. The unrealized losses were primarily caused by interest rate increases and not by unfavorable changes in the credit quality associated with these securities. At each reporting period, the Company evaluates securities for impairment when the fair value of the investment is less than its amortized cost. The Company evaluated the underlying credit quality and credit ratings of the issuers, noting no significant deterioration since purchase. As of December 31, 2019, the Company did not have the intent to sell any of the securities in an unrealized loss position. Therefore, the Company believes these losses to be temporary.

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4.
Fair Value
Certain assets and liabilities are measured at fair value in the Consolidated Financial Statements or have fair values disclosed in the Notes to the Consolidated Financial Statements. These assets and liabilities are classified into one of three levels of a hierarchy defined by GAAP. In instances in which the inputs used to measure fair value fall into different levels of the fair value hierarchy, the fair value measurement is categorized in its entirety based on the lowest level input that is significant to the fair value measurement in its entirety. The Company’s assessment of the significance of a particular item to the fair value measurement in its entirety requires judgment, including the consideration of inputs specific to the asset or liability.
The fair value hierarchy is summarized as follows:
Level 1 — Quoted prices (unadjusted) for identical assets/liabilities in active markets.
Level 2 — Other observable inputs, either directly or indirectly, including:
Quoted prices for similar assets/liabilities in active markets;
Quoted prices for identical or similar assets/liabilities in inactive markets (e.g., few transactions, limited information, noncurrent prices, high variability over time);
Inputs other than quoted prices that are observable for the asset/liability (e.g., interest rates, yield curves, implied volatilities, credit spreads); and
Inputs that are corroborated by other observable market data.
Level 3 — Unobservable inputs that cannot be corroborated by observable market data.
There were no transfers in or out of Level 3 financial assets or liabilities during the years ended December 31, 2019 or 2018.
Nonfinancial assets and liabilities or financial assets and liabilities that are measured at fair value on a nonrecurring basis are subject to fair value adjustments only in certain circumstances, such as when the Company records an impairment. There were no significant fair value adjustments for these assets and liabilities recorded during the years ended December 31, 2019 or 2018.
The following methods and assumptions were used to estimate the fair value and determine the fair value hierarchy classification of each class of financial instrument included in the tables below:
Cash and Cash Equivalents. The carrying value of cash and cash equivalents approximates fair value as maturities are less than three months. Fair values of cash equivalent instruments that do not trade on a regular basis in active markets are classified as Level 2.
Debt and Equity Securities. Fair values of debt and equity securities are based on quoted market prices, where available. The Company obtains one price for each security primarily from a third-party pricing service (pricing service), which generally uses quoted or other observable inputs for the determination of fair value. The pricing service normally derives the security prices through recently reported trades for identical or similar securities, and, if necessary, makes adjustments through the reporting date based upon available observable market information. For securities not actively traded, the pricing service may use quoted market prices of comparable instruments or discounted cash flow analyses, incorporating inputs that are currently observable in the markets for similar securities. Inputs that are often used in the valuation methodologies include, but are not limited to, benchmark yields, credit spreads, default rates, prepayment speeds and nonbinding broker quotes. As the Company is responsible for the determination of fair value, it performs quarterly analyses on the prices received from the pricing service to determine whether the prices are reasonable estimates of fair value. Specifically, the Company compares the prices received from the pricing service to prices reported by a secondary pricing source, such as its custodian, its investment consultant and third-party investment advisors. Additionally, the Company compares changes in the reported market values and returns to relevant market indices to test the reasonableness of the reported prices. The Company’s internal price verification procedures and reviews of fair value methodology documentation provided by independent pricing services have not historically resulted in adjustment to the prices obtained from the pricing service.
Fair values of debt securities that do not trade on a regular basis in active markets but are priced using other observable inputs are classified as Level 2.
Fair value estimates for Level 1 and Level 2 equity securities are based on quoted market prices for actively traded equity securities and/or other market data for the same or comparable instruments and transactions in establishing the prices.
The fair values of Level 3 investments in corporate bonds, which are not a significant portion of our investments, are estimated using valuation techniques that rely heavily on management assumptions and qualitative observations.
Throughout the procedures discussed above in relation to the Company’s processes for validating third-party pricing information, the Company validates the understanding of assumptions and inputs used in security pricing and determines the proper classification in the hierarchy based on that understanding.

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Assets Under Management. Assets under management consists of debt securities and other investments held to fund costs associated with the AARP Program and are priced and classified using the same methodologies as the Company’s investments in debt and equity securities.
Long-Term Debt. The fair values of the Company’s long-term debt are estimated and classified using the same methodologies as the Company’s investments in debt securities.
The following table presents a summary of fair value measurements by level and carrying values for items measured at fair value on a recurring basis in the Consolidated Balance Sheets:
(in millions)
 
Quoted Prices
in Active
Markets
(Level 1)
 
Other
Observable
Inputs
(Level 2)
 
Unobservable
Inputs
(Level 3)
 
Total
Fair and Carrying
Value
December 31, 2019
 
 
 
 
 
 
 
 
Cash and cash equivalents
 
$
10,837

 
$
148

 
$

 
$
10,985

Debt securities - available-for-sale:
 
 
 
 
 
 
 
 
U.S. government and agency obligations
 
3,369

 
184

 

 
3,553

State and municipal obligations
 

 
5,926

 

 
5,926

Corporate obligations
 
70

 
17,923

 
249

 
18,242

U.S. agency mortgage-backed securities
 

 
6,528

 

 
6,528

Non-U.S. agency mortgage-backed securities
 

 
1,845

 

 
1,845

Total debt securities - available-for-sale
 
3,439

 
32,406

 
249

 
36,094

Equity securities
 
1,734

 
22

 

 
1,756

Assets under management
 
1,123

 
1,918

 
35

 
3,076

Total assets at fair value

$
17,133

 
$
34,494

 
$
284

 
$
51,911

Percentage of total assets at fair value
 
33
%
 
66
%
 
1
%
 
100
%
December 31, 2018
 
 
 
 
 
 
 
 
Cash and cash equivalents
 
$
10,757

 
$
109

 
$

 
$
10,866

Debt securities - available-for-sale:
 
 
 
 
 
 
 
 
U.S. government and agency obligations
 
3,060

 
345

 

 
3,405

State and municipal obligations
 

 
7,121

 

 
7,121

Corporate obligations
 
39

 
14,950

 
173

 
15,162

U.S. agency mortgage-backed securities
 

 
4,852

 

 
4,852

Non-U.S. agency mortgage-backed securities
 

 
1,358

 

 
1,358

Total debt securities - available-for-sale
 
3,099

 
28,626

 
173

 
31,898

Equity securities
 
1,832

 
13

 

 
1,845

Assets under management
 
1,086

 
1,938

 
8

 
3,032

Total assets at fair value
 
$
16,774

 
$
30,686

 
$
181

 
$
47,641

Percentage of total assets at fair value
 
35
%
 
65
%
 
%
 
100
%


53


The following table presents a summary of fair value measurements by level and carrying values for certain financial instruments not measured at fair value on a recurring basis in the Consolidated Balance Sheets:
(in millions)
 
Quoted Prices
in Active
Markets
(Level 1)
 
Other
Observable
Inputs
(Level 2)
 
Unobservable
Inputs
(Level 3)
 
Total
Fair
Value
 
Total Carrying Value
December 31, 2019
 
 
 
 
 
 
 
 
 
 
Debt securities - held-to-maturity
 
$
541

 
$
181

 
$
253

 
$
975

 
$
972

Long-term debt and other financing obligations
 
$

 
$
45,078

 
$

 
$
45,078

 
$
40,278

December 31, 2018
 
 
 
 
 
 
 
 
 
 
Debt securities - held-to-maturity
 
$
260

 
$
65

 
$
295

 
$
620

 
$
621

Long-term debt and other financing obligations
 
$

 
$
37,944

 
$

 
$
37,944

 
$
36,554


The carrying amounts reported on the Consolidated Balance Sheets for other current financial assets and liabilities approximate fair value because of their short-term nature. These assets and liabilities are not listed in the table above.
5.
Property, Equipment and Capitalized Software
A summary of property, equipment and capitalized software is as follows:
(in millions)
 
December 31, 2019
 
December 31, 2018
Land and improvements
 
$
589

 
$
566

Buildings and improvements
 
4,705

 
4,470

Computer equipment
 
2,015

 
1,984

Furniture and fixtures
 
1,752

 
1,525

Less accumulated depreciation
 
(3,328
)
 
(2,787
)
Property and equipment, net
 
5,733

 
5,758

Capitalized software
 
4,638

 
4,054

Less accumulated amortization
 
(1,667
)
 
(1,354
)
Capitalized software, net
 
2,971

 
2,700

Total property, equipment and capitalized software, net
 
$
8,704

 
$
8,458


 
Depreciation expense for property and equipment for the years ended December 31, 2019, 2018 and 2017 was $995 million, $924 million and $799 million, respectively. Amortization expense for capitalized software for the years ended December 31, 2019, 2018 and 2017 was $721 million, $606 million and $550 million, respectively.
6.
Goodwill and Other Intangible Assets
Changes in the carrying amount of goodwill, by reportable segment, were as follows:
(in millions)
 
UnitedHealthcare
 
OptumHealth
 
OptumInsight
 
OptumRx
 
Consolidated
Balance at January 1, 2018
 
$
24,484

 
$
11,488

 
$
5,674

 
$
12,910

 
$
54,556

Acquisitions
 
2,723

 
471

 
106

 
1,881

 
5,181

Foreign currency effects and adjustments, net
 
(807
)
 
(12
)
 
(8
)
 

 
(827
)
Balance at December 31, 2018
 
26,400

 
11,947

 
5,772

 
14,791

 
58,910

Acquisitions
 
1,022

 
3,395

 
2,521

 
6

 
6,944

Foreign currency effects and adjustments, net
 
(194
)
 

 
(1
)
 

 
(195
)
Balance at December 31, 2019
 
$
27,228

 
$
15,342

 
$
8,292

 
$
14,797

 
$
65,659



54


The gross carrying value, accumulated amortization and net carrying value of other intangible assets were as follows:
 
 
December 31, 2019
 
December 31, 2018
(in millions)
 
Gross Carrying Value
 
Accumulated Amortization
 
Net Carrying Value
 
Gross Carrying Value
 
Accumulated Amortization
 
Net Carrying Value
Customer-related
 
$
12,968

 
$
(4,319
)
 
$
8,649

 
$
11,622

 
$
(3,908
)
 
$
7,714

Trademarks and technology
 
1,186

 
(525
)
 
661

 
1,122

 
(512
)
 
610

Trademarks and other indefinite-lived
 
726

 

 
726

 
745

 

 
745

Other
 
541

 
(228
)
 
313

 
428

 
(172
)
 
256

Total
 
$
15,421

 
$
(5,072
)
 
$
10,349

 
$
13,917

 
$
(4,592
)
 
$
9,325


The acquisition date fair values and weighted-average useful lives assigned to finite-lived intangible assets acquired in business combinations consisted of the following by year of acquisition:
 
 
2019
 
2018
(in millions, except years)
 
Fair Value
 
Weighted-Average Useful Life
 
Fair Value
 
Weighted-Average Useful Life
Customer-related
 
$
1,750

 
13 years
 
$
1,355

 
17 years
Trademarks and technology
 
163

 
5 years
 
122

 
4 years
Other
 
119

 
11 years
 
97

 
9 years
Total acquired finite-lived intangible assets
 
$
2,032

 
13 years
 
$
1,574

 
16 years

 Estimated full year amortization expense relating to intangible assets for each of the next five years ending December 31 is as follows:
(in millions)
 
 
2020
 
$
1,017

2021
 
933

2022
 
826

2023
 
763

2024
 
718


Amortization expense relating to intangible assets for the years ended December 31, 2019, 2018 and 2017 was $1.0 billion, $898 million and $896 million, respectively.
7.
Medical Costs Payable
The following table shows the components of the change in medical costs payable for the years ended December 31:
(in millions)
 
2019
 
2018
 
2017
Medical costs payable, beginning of period
 
$
19,891

 
$
17,871

 
$
16,391

Acquisitions
 
679

 
339

 
83

Reported medical costs:
 
 
 
 
 
 
Current year
 
157,020

 
145,723

 
130,726

Prior years
 
(580
)
 
(320
)
 
(690
)
Total reported medical costs
 
156,440

 
145,403

 
130,036

Medical payments:
 
 
 
 
 
 
Payments for current year
 
(137,155
)
 
(127,155
)
 
(113,811
)
Payments for prior years
 
(18,165
)
 
(16,567
)
 
(14,828
)
Total medical payments
 
(155,320
)
 
(143,722
)
 
(128,639
)
Medical costs payable, end of period
 
$
21,690

 
$
19,891

 
$
17,871


For the years ended December 31, 2019 and 2017 medical cost reserve development was primarily driven by lower than expected health system utilization levels. For the year ended December 31, 2018, no individual factors significantly impacted medical cost reserve development.

55


Medical costs payable included IBNR of $13.8 billion and $13.2 billion at December 31, 2019 and 2018, respectively. Substantially all of the IBNR balance as of December 31, 2019 relates to the current year. The following is information about incurred and paid medical cost development as of December 31, 2019:
 
 
Net Incurred Medical Costs
 (in millions)
 
For the Years ended December 31,
Year
 
2018
 
2019
2018
 
$
145,723

 
$
145,293

2019
 
 
 
157,020

Total
 
 
 
$
302,313

 
 
 
 
 
 
 
Net Cumulative Medical Payments
 (in millions)
 
For the Years ended December 31,
Year
 
2018
 
2019
2018
 
$
(127,155
)
 
$
(144,143
)
2019
 
 
 
(137,155
)
Total
 
 
 
(281,298
)
Net remaining outstanding liabilities prior to 2018
 
 
 
675

Total medical costs payable
 
 
 
$
21,690





56


8.
Commercial Paper and Long-Term Debt
Commercial paper and senior unsecured long-term debt consisted of the following:
 
 
December 31, 2019
 
December 31, 2018
(in millions, except percentages)
 
Par Value
 
Carrying Value
 
Fair Value
 
Par Value
 
Carrying Value
 
Fair Value
Commercial paper
 
$
400

 
$
400

 
$
400

 
$

 
$

 
$

1.700% notes due February 2019
 

 

 

 
750

 
750

 
749

1.625% notes due March 2019
 

 

 

 
500

 
500

 
499

2.300% notes due December 2019
 

 

 

 
500

 
494

 
497

2.700% notes due July 2020
 
1,500

 
1,499

 
1,506

 
1,500

 
1,498

 
1,494

Floating rate notes due October 2020
 
300

 
300

 
300

 
300

 
299

 
298

3.875% notes due October 2020
 
450

 
450

 
455

 
450

 
443

 
456

1.950% notes due October 2020
 
900

 
899

 
900

 
900

 
897

 
884

4.700% notes due February 2021
 
400

 
403

 
410

 
400

 
398

 
412

2.125% notes due March 2021
 
750

 
749

 
753

 
750

 
747

 
734

Floating rate notes due June 2021
 
350

 
349

 
350

 
350

 
349

 
347

3.150% notes due June 2021
 
400

 
399

 
407

 
400

 
399

 
400

3.375% notes due November 2021
 
500

 
501

 
512

 
500

 
489

 
503

2.875% notes due December 2021
 
750

 
753

 
765

 
750

 
735

 
748

2.875% notes due March 2022
 
1,100

 
1,087

 
1,121

 
1,100

 
1,051

 
1,091

3.350% notes due July 2022
 
1,000

 
998

 
1,036

 
1,000

 
997

 
1,005

2.375% notes due October 2022
 
900

 
896

 
911

 
900

 
894

 
872

0.000% notes due November 2022
 
15

 
13

 
14

 
15

 
12

 
13

2.750% notes due February 2023
 
625

 
624

 
638

 
625

 
602

 
611

2.875% notes due March 2023
 
750

 
770

 
770

 
750

 
750

 
739

3.500% notes due June 2023
 
750

 
747

 
786

 
750

 
746

 
756

3.500% notes due February 2024
 
750

 
746

 
792

 
750

 
745

 
755

2.375% notes due August 2024
 
750

 
747

 
760

 

 

 

3.750% notes due July 2025
 
2,000

 
1,990

 
2,161

 
2,000

 
1,989

 
2,025

3.700% notes due December 2025
 
300

 
298

 
325

 
300

 
298

 
303

3.100% notes due March 2026
 
1,000

 
996

 
1,048

 
1,000

 
995

 
965

3.450% notes due January 2027
 
750

 
746

 
804

 
750

 
746

 
742

3.375% notes due April 2027
 
625

 
620

 
667

 
625

 
619

 
611

2.950% notes due October 2027
 
950

 
939

 
988

 
950

 
938

 
898

3.850% notes due June 2028
 
1,150

 
1,142

 
1,269

 
1,150

 
1,142

 
1,163

3.875% notes due December 2028
 
850

 
843

 
941

 
850

 
842

 
861

2.875% notes due August 2029
 
1,000

 
993

 
1,029

 

 

 

4.625% notes due July 2035
 
1,000

 
992

 
1,215

 
1,000

 
992

 
1,060

5.800% notes due March 2036
 
850

 
838

 
1,129

 
850

 
838

 
1,003

6.500% notes due June 2037
 
500

 
492

 
712

 
500

 
492

 
638

6.625% notes due November 2037
 
650

 
641

 
940

 
650

 
641

 
841

6.875% notes due February 2038
 
1,100

 
1,076

 
1,631

 
1,100

 
1,076

 
1,437

3.500% notes due August 2039
 
1,250

 
1,241

 
1,313

 

 

 

5.700% notes due October 2040
 
300

 
296

 
396

 
300

 
296

 
355

5.950% notes due February 2041
 
350

 
345

 
475

 
350

 
345

 
426

4.625% notes due November 2041
 
600

 
589

 
716

 
600

 
588

 
627

4.375% notes due March 2042
 
502

 
484

 
580

 
502

 
484

 
503

3.950% notes due October 2042
 
625

 
607

 
688

 
625

 
607

 
596

4.250% notes due March 2043
 
750

 
735

 
856

 
750

 
734

 
744

4.750% notes due July 2045
 
2,000

 
1,973

 
2,463

 
2,000

 
1,973

 
2,116

4.200% notes due January 2047
 
750

 
738

 
861

 
750

 
738

 
745

4.250% notes due April 2047
 
725

 
717

 
839

 
725

 
717

 
719

3.750% notes due October 2047
 
950

 
934

 
1,023

 
950

 
933

 
869

4.250% notes due June 2048
 
1,350

 
1,330

 
1,569

 
1,350

 
1,329

 
1,349

4.450% notes due December 2048
 
1,100

 
1,086

 
1,316

 
1,100

 
1,087

 
1,132

3.700% notes due August 2049
 
1,250

 
1,235

 
1,344

 

 

 

3.875% notes due August 2059
 
1,250

 
1,228

 
1,350

 

 

 

Total commercial paper and long-term debt
 
$
39,817

 
$
39,474

 
$
44,234

 
$
35,667

 
$
35,234

 
$
36,591



57



The Company’s long-term debt obligations also included $1.2 billion and $1.3 billion of other financing obligations, of which $322 million and $229 million were current as of December 31, 2019 and 2018, respectively.
Maturities of commercial paper and long-term debt for the years ending December 31 are as follows:
(in millions)
 
 
2020
 
$
3,870

2021
 
3,325

2022
 
3,190

2023
 
2,300

2024
 
1,675

Thereafter
 
26,660


Commercial Paper and Revolving Bank Credit Facilities
Commercial paper consists of short-duration, senior unsecured debt privately placed on a discount basis through broker-dealers.
The Company has $4.4 billion five-year, $4.4 billion three-year and $3.8 billion 364-day revolving bank credit facilities with 25 banks, which mature in December 2024, December 2022 and December 2020, respectively. These facilities provide liquidity support for the Company’s commercial paper program and are available for general corporate purposes. As of December 31, 2019, no amounts had been drawn on any of the bank credit facilities. The annual interest rates, which are variable based on term, are calculated based on the London Interbank Offered Rate (LIBOR) plus a credit spread based on the Company’s senior unsecured credit ratings. If amounts had been drawn on the bank credit facilities as of December 31, 2019, annual interest rates would have ranged from 2.4% to 2.6%.
Debt Covenants
The Company’s bank credit facilities contain various covenants, including requiring the Company to maintain a debt to debt-plus-shareholders’ equity ratio of not more than 60%. The Company was in compliance with its debt covenants as of December 31, 2019.
9.
Income Taxes
The current income tax provision reflects the tax consequences of revenues and expenses currently taxable or deductible on various income tax returns for the year reported. The deferred income tax provision or benefit generally reflects the net change in deferred income tax assets and liabilities during the year, excluding any deferred income tax assets and liabilities of acquired businesses. The components of the provision for income taxes for the years ended December 31 are as follows:
(in millions)
 
2019
 
2018
 
2017
Current Provision:
 
 
 
 
 
 
Federal
 
$
2,629

 
$
2,897

 
$
3,597

State and local
 
319

 
219

 
314

Foreign
 
564

 
404

 
254

Total current provision
 
3,512

 
3,520

 
4,165

Deferred provision (benefit)
 
230

 
42

 
(965
)
Total provision for income taxes
 
$
3,742

 
$
3,562

 
$
3,200




58


The reconciliation of the tax provision at the U.S. federal statutory rate to the provision for income taxes and the effective tax rate for the years ended December 31 is as follows:
(in millions, except percentages)
 
2019
 
2018
 
2017
Tax provision at the U.S. federal statutory rate
 
$
3,776

 
21.0
 %
 
$
3,348

 
21.0
 %
 
$
4,908

 
35.0
 %
Change in tax law
 

 

 

 

 
(1,199
)
 
(8.6
)
State income taxes, net of federal benefit
 
271

 
1.5

 
168

 
1.0

 
197

 
1.4

Share-based awards - excess tax benefit
 
(132
)
 
(0.7
)
 
(161
)
 
(1.0
)
 
(319
)
 
(2.3
)
Non-deductible compensation
 
119

 
0.7

 
117

 
0.7

 
175

 
1.3

Health insurance industry tax
 

 

 
552

 
3.5

 

 

Foreign rate differential
 
(214
)
 
(1.2
)
 
(203
)
 
(1.3
)
 
(282
)
 
(2.0
)
Other, net
 
(78
)
 
(0.5
)
 
(259
)
 
(1.6
)
 
(280
)
 
(2.0
)
Provision for income taxes
 
$
3,742

 
20.8
 %
 
$
3,562

 
22.3
 %
 
$
3,200

 
22.8
 %

Deferred income tax assets and liabilities are recognized for the differences between the financial and income tax reporting bases of assets and liabilities based on enacted tax rates and laws. The components of deferred income tax assets and liabilities as of December 31 are as follows:
(in millions)
 
2019
 
2018
Deferred income tax assets:
 
 
 
 
Accrued expenses and allowances
 
$
654

 
$
551

U.S. federal and state net operating loss carryforwards
 
260

 
190

Share-based compensation
 
97

 
91

Nondeductible liabilities
 
184

 
184

Non-U.S. tax loss carryforwards
 
420

 
426

Lease liability
 
892

 

Other-domestic
 
179

 
306

Other-non-U.S.
 
329

 
337

Subtotal
 
3,015

 
2,085

Less: valuation allowances
 
(147
)
 
(84
)
Total deferred income tax assets
 
2,868

 
2,001

Deferred income tax liabilities:
 
 
 
 
U.S. federal and state intangible assets
 
(2,370
)
 
(2,131
)
Non-U.S. goodwill and intangible assets
 
(735
)
 
(709
)
Capitalized software
 
(683
)
 
(603
)
Depreciation and amortization
 
(301
)
 
(266
)
Prepaid expenses
 
(172
)
 
(152
)
Outside basis in partnerships
 
(317
)
 
(300
)
Lease right-of-use asset
 
(887
)
 

Other-domestic
 
(177
)
 

Other-non-U.S.
 
(219
)
 
(314
)
Total deferred income tax liabilities
 
(5,861
)
 
(4,475
)
Net deferred income tax liabilities
 
$
(2,993
)
 
$
(2,474
)

Valuation allowances are provided when it is considered more likely than not that deferred tax assets will not be realized. The valuation allowances primarily relate to future tax benefits on certain federal, state and non-U.S. net operating loss carryforwards. Federal net operating loss carryforwards of $62 million expire beginning in 2022 through 2037 and $179 million have an indefinite carryforward period; state net operating loss carryforwards expire beginning in 2020 through 2039, with some having an indefinite carryforward period. Substantially all of the non-U.S. tax loss carryforwards have indefinite carryforward periods.
As of December 31, 2019, the Company’s undistributed earnings from non-U.S. subsidiaries are intended to be indefinitely reinvested in non-U.S. operations, and therefore no U.S. deferred taxes have been recorded. Taxes payable on the remittance of such earnings would be minimal.

59


A reconciliation of the beginning and ending amount of unrecognized tax benefits as of December 31 is as follows:
(in millions)
 
2019
 
2018
 
2017
Gross unrecognized tax benefits, beginning of period
 
$
1,056

 
$
598

 
$
263

Gross increases:
 
 

 
 

 
 

Current year tax positions
 
512

 
487

 
356

Prior year tax positions
 
2

 
87

 
40

Gross decreases:
 
 

 
 

 
 

Prior year tax positions
 
(96
)
 
(84
)
 
(33
)
Settlements
 
(46
)
 
(20
)
 
(24
)
Statute of limitations lapses
 
(5
)
 
(12
)
 
(4
)
Gross unrecognized tax benefits, end of period
 
$
1,423

 
$
1,056

 
$
598


The Company believes it is reasonably possible that its liability for unrecognized tax benefits will decrease in the next twelve months by $90 million as a result of audit settlements and the expiration of statutes of limitations.
The Company classifies interest and penalties associated with uncertain income tax positions as income taxes within its Consolidated Statements of Operations. During the years ended December 31, 2019, 2018 and 2017, the Company recognized $19 million, $6 million and $14 million of interest and penalties, respectively. The Company had $76 million and $95 million of accrued interest and penalties for uncertain tax positions as of December 31, 2019 and 2018, respectively. These amounts are not included in the reconciliation above. As of December 31, 2019, there were $852 million of unrecognized tax benefits that, if recognized, would affect the effective tax rate.
The Company currently files income tax returns in the United States, various states and localities and non-U.S. jurisdictions. The U.S. Internal Revenue Service (IRS) has completed exams on the consolidated income tax returns for fiscal years 2016 and prior. The Company’s 2017, 2018 and 2019 tax years are under review by the IRS under its Compliance Assurance Program. With the exception of a few states, the Company is no longer subject to income tax examinations prior to the 2013 tax year. In general, the Company is subject to examination in non-U.S. jurisdictions for years 2014 and forward.
10.
Shareholders' Equity
Regulatory Capital and Dividend Restrictions
The Company’s regulated insurance and HMO subsidiaries are subject to regulations and standards in their respective jurisdictions. These standards, among other things, require these subsidiaries to maintain specified levels of statutory capital, as defined by each jurisdiction, and restrict the timing and amount of dividends and other distributions that may be paid to their parent companies. In the United States, most of these state regulations and standards are generally consistent with model regulations established by the National Association of Insurance Commissioners. These standards generally permit dividends to be paid from statutory unassigned surplus of the regulated subsidiary and are limited based on the regulated subsidiary’s level of statutory net income and statutory capital and surplus. These dividends are referred to as “ordinary dividends” and generally may be paid without prior regulatory approval. If the dividend, together with other dividends paid within the preceding twelve months, exceeds a specified statutory limit or is paid from sources other than earned surplus, it is generally considered an “extraordinary dividend” and must receive prior regulatory approval.
Optum Bank must meet minimum capital requirements of the Federal Deposit Insurance Corporation (FDIC) under the capital adequacy rules to which it is subject. At December 31, 2019, the Company believes that Optum Bank met the FDIC requirements to be considered “Well Capitalized.”
For the year ended December 31, 2019, the Company’s regulated subsidiaries paid their parent companies dividends of $5.6 billion, including $1.3 billion of extraordinary dividends. For the year ended December 31, 2018, the Company’s regulated subsidiaries paid their parent companies dividends of $3.7 billion, including $1.1 billion of extraordinary dividends.
The Company's regulated subsidiaries had estimated aggregate statutory capital and surplus of $22.7 billion as of December 31, 2019. The estimated statutory capital and surplus necessary to satisfy regulatory requirements of the Company's regulated subsidiaries was approximately $9.7 billion as of December 31, 2019.
Share Repurchase Program
Under its Board of Directors’ authorization, the Company maintains a share repurchase program. The objectives of the share repurchase program are to optimize the Company’s capital structure and cost of capital, thereby improving returns to shareholders, as well as to offset the dilutive impact of share-based awards. Repurchases may be made from time to time in

60


open market purchases or other types of transactions (including prepaid or structured share repurchase programs), subject to certain Board restrictions. In June 2018, the Board renewed the Company’s share repurchase program with an authorization to
repurchase up to 100 million shares of its common stock.

A summary of common share repurchases for the years ended December 31, 2019 and 2018 is as follows:
 
 
Years Ended December 31,
(in millions, except per share data)
 
2019
 
2018
Common share repurchases, shares
 
22

 
19

Common share repurchases, average price per share
 
$
245.97

 
$
236.72

Common share repurchases, aggregate cost
 
$
5,500

 
$
4,500

Board authorized shares remaining
 
72

 
94


Dividends
In June 2019, the Company’s Board of Directors increased the Company’s quarterly cash dividend to shareholders to an annual rate of $4.32 compared to $3.60 per share, which the Company had paid since June 2018. Declaration and payment of future quarterly dividends is at the discretion of the Board and may be adjusted as business needs or market conditions change.
11.
Share-Based Compensation
The Company’s outstanding share-based awards consist mainly of non-qualified stock options and restricted shares. As of December 31, 2019, the Company had 32 million shares available for future grants of share-based awards under the Plan. As of December 31, 2019, there were also 5 million shares of common stock available for issuance under the ESPP.
Stock Options
Stock option activity for the year ended December 31, 2019 is summarized in the table below:
 
Shares
 
Weighted-
Average
Exercise
Price
 
Weighted-
Average
Remaining
Contractual Life
 
Aggregate
Intrinsic Value
 
(in millions)
 
 
 
(in years)
 
(in millions)
Outstanding at beginning of period
35

 
$
131

 
 
 
 
Granted
7

 
260

 
 
 
 
Exercised
(9
)
 
94

 
 
 
 
Forfeited
(1
)
 
212

 
 
 
 
Outstanding at end of period
32

 
166

 
6.5
 
$
4,106

Exercisable at end of period
15

 
114

 
5.0
 
2,716

Vested and expected to vest, end of period
31

 
165

 
6.4
 
4,068


Restricted Shares
Restricted share activity for the year ended December 31, 2019 is summarized in the table below:
(shares in millions)
 
Shares
 
Weighted-Average
Grant Date
Fair Value
per Share
Nonvested at beginning of period
 
6

 
$
163

Granted
 
2

 
259

Vested
 
(3
)
 
147

Nonvested at end of period
 
5

 
207



61


Other Share-Based Compensation Data
(in millions, except per share amounts)
 
For the Years Ended December 31,
 
2019
 
2018
 
2017
Stock Options
 
 
 
 
 
 
Weighted-average grant date fair value of shares granted, per share
 
$
46

 
$
43

 
$
29

Total intrinsic value of stock options exercised
 
1,398

 
1,431

 
1,473

Restricted Shares
 
 
 
 
 
 
Weighted-average grant date fair value of shares granted, per share
 
259

 
229

 
163

Total fair value of restricted shares vested
 
$
545

 
$
521

 
$
460

Employee Stock Purchase Plan
 
 
 
 
 
 
Number of shares purchased
 
1

 
2

 
2

Share-Based Compensation Items
 
 
 
 
 
 
Share-based compensation expense, before tax
 
$
697

 
$
638

 
$
597

Share-based compensation expense, net of tax effects
 
641

 
587

 
531

Income tax benefit realized from share-based award exercises
 
201

 
239

 
431

(in millions, except years)
 
December 31, 2019
Unrecognized compensation expense related to share awards
 
$
714

Weighted-average years to recognize compensation expense
 
1.3


Share-Based Compensation Recognition and Estimates
The principal assumptions the Company used in calculating grant-date fair value for stock options were as follows:
 
 
For the Years Ended December 31,
 
 
2019
 
2018
 
2017
Risk-free interest rate
 
1.5% - 2.5%
 
2.6% - 3.1%
 
1.9% - 2.1%
Expected volatility
 
19.4% - 21.6%
 
18.7% - 19.3%
 
18.5% - 20.7%
Expected dividend yield
 
1.4% - 1.8%
 
1.3% - 1.5%
 
1.4% - 1.6%
Forfeiture rate
 
5.0%
 
5.0%
 
5.0%
Expected life in years
 
5.3
 
5.6
 
5.7

Risk-free interest rates are based on U.S. Treasury yields in effect at the time of grant. Expected volatilities are based on the historical volatility of the Company’s common stock and the implied volatility from exchange-traded options on the Company’s common stock. Expected dividend yields are based on the per share cash dividend paid by the Company. The Company uses historical data to estimate option exercises and forfeitures within the valuation model. The expected lives of options granted represents the period of time that the awards granted are expected to be outstanding based on historical exercise patterns.
Other Employee Benefit Plans
The Company offers a 401(k) plan for its employees. Compensation expense related to this plan was not material for 2019, 2018 and 2017.
 
In addition, the Company maintains non-qualified, deferred compensation plans, which allow certain members of senior management and executives to defer portions of their salary or bonus and receive certain Company contributions on such deferrals, subject to plan limitations. The deferrals are recorded within long-term investments with an approximately equal amount in other liabilities in the Consolidated Balance Sheets. The total deferrals are distributable based upon termination of employment or other periods, as elected under each plan and were $1.4 billion and $988 million as of December 31, 2019 and 2018, respectively.


62


12.
Commitments and Contingencies
Leases
Operating lease costs were $1.0 billion, $751 million and $710 million for the years ended December 31, 2019, 2018 and 2017, respectively, and included immaterial variable and short-term lease costs for the year ended December 31, 2019. Cash payments made on the Company’s operating lease liabilities were $746 million for the year ended December 31, 2019, which were classified within operating activities in the Consolidated Statements of Cash Flows. As of December 31, 2019, the Company’s weighted-average remaining lease term and weighted-average discount rate for its operating leases were 8.6 years and 3.9%, respectively.
As of December 31, 2019, future minimum annual lease payments under all non-cancelable operating leases were as follows:
(in millions)
 
Future Minimum Lease Payments
2020
 
$
804

2021
 
723

2022
 
604

2023
 
499

2024
 
402

Thereafter
 
1,671

Total future minimum lease payments
 
4,703

Less imputed interest
 
(744
)
Total
 
$
3,959


The Company provides guarantees related to its service level under certain contracts. If minimum standards are not met, the Company may be financially at risk up to a stated percentage of the contracted fee or a stated dollar amount. None of the amounts accrued, paid or charged to income for service level guarantees were material as of December 31, 2019, 2018 or 2017.
As of December 31, 2019, the Company had outstanding, undrawn letters of credit with financial institutions of $98 million and surety bonds outstanding with insurance companies of $1.2 billion, primarily to bond contractual performance.
Legal Matters
Because of the nature of its businesses, the Company is frequently made party to a variety of legal actions and regulatory inquiries, including class actions and suits brought by members, care providers, consumer advocacy organizations, customers and regulators, relating to the Company’s businesses, including management and administration of health benefit plans and other services. These matters include medical malpractice, employment, intellectual property, antitrust, privacy and contract claims and claims related to health care benefits coverage and other business practices.
The Company records liabilities for its estimates of probable costs resulting from these matters where appropriate. Estimates of costs resulting from legal and regulatory matters involving the Company are inherently difficult to predict, particularly where the matters: involve indeterminate claims for monetary damages or may involve fines, penalties or punitive damages; present novel legal theories or represent a shift in regulatory policy; involve a large number of claimants or regulatory bodies; are in the early stages of the proceedings; or could result in a change in business practices. Accordingly, the Company is often unable to estimate the losses or ranges of losses for those matters where there is a reasonable possibility or it is probable that a loss may be incurred.
Government Investigations, Audits and Reviews
The Company has been involved or is currently involved in various governmental investigations, audits and reviews. These include routine, regular and special investigations, audits and reviews by CMS, state insurance and health and welfare departments, state attorneys general, the Office of the Inspector General, the Office of Personnel Management, the Office of Civil Rights, the Government Accountability Office, the Federal Trade Commission, U.S. Congressional committees, the U.S. Department of Justice, the SEC, the Internal Revenue Service, the U.S. Drug Enforcement Administration, the U.S. Department of Labor, the Federal Deposit Insurance Corporation, the Defense Contract Audit Agency and other governmental authorities. Similarly, our international businesses are also subject to investigations, audits and reviews by applicable foreign governments, including South American and other non-U.S. governmental authorities. Certain of the Company’s businesses have been reviewed or are currently under review, including for, among other matters, compliance with coding and other requirements under the Medicare risk-adjustment model. CMS has selected certain of the Company’s local plans for risk adjustment data

63


validation (RADV) audits to validate the coding practices of and supporting documentation maintained by health care providers and such audits may result in retrospective adjustments to payments made to the Company’s health plans.
On February 14, 2017, the Department of Justice (DOJ) announced its decision to pursue certain claims within a lawsuit initially asserted against the Company and filed under seal by a whistleblower in 2011. The whistleblower’s complaint, which was unsealed on February 15, 2017, alleges that the Company made improper risk adjustment submissions and violated the False Claims Act. On February 12, 2018, the court granted in part and denied in part the Company’s motion to dismiss. In May 2018, DOJ moved to dismiss the Company’s counterclaims, which were filed in March 2018, and moved for partial summary judgment. In March 2019, the court denied the government’s motion for partial summary judgment and dismissed the Company’s counterclaims without prejudice. The Company cannot reasonably estimate the outcome that may result from this matter given its procedural status.
13.
Business Combinations
During the year ended December 31, 2019, the Company completed several business combinations for total cash consideration of $9.9 billion.
The total consideration exceeded the estimated fair value of the net tangible assets acquired by $8.9 billion, of which $2.0 billion has been allocated to finite-lived intangible assets and $6.9 billion to goodwill. The goodwill is not deductible for income tax purposes.
Acquired tangible assets (liabilities) at acquisition date were:
(in millions)
 
 
Cash and cash equivalents
 
$
1,542

Accounts receivable and other current assets
 
1,788

Property, equipment and other long-term assets
 
1,969

Medical costs payable
 
(679
)
Accounts payable and other current liabilities
 
(1,869
)
Other long-term liabilities
 
(1,488
)
Total net tangible assets
 
$
1,263


The preliminary purchase price allocations for the various business combinations are subject to adjustment as valuation analyses, primarily related to intangible assets and contingent and tax liabilities, are finalized. See Note 6 for a summary of the acquisition date fair values and weighted-average useful lives assigned to acquired finite-lived intangible assets.

The results of operations and financial condition of acquired entities have been included in the Company’s consolidated results and the results of the corresponding operating segment as of date of acquisition. Through December 31, 2019, acquired entities’ impact on revenues and net earnings was not material.
Unaudited pro forma revenues for the years ended December 31, 2019 and 2018 as if the acquisitions had occurred on January 1, 2018 were immaterial for both periods. The pro forma effects of the acquisitions on net earnings were immaterial for both years.
14.
Segment Financial Information
Factors used to determine the Company’s reportable segments include the nature of operating activities, economic characteristics, existence of separate senior management teams and the type of information used by the Company’s chief operating decision maker to evaluate its results of operations. Reportable segments with similar economic characteristics, products and services, customers, distribution methods and operational processes that operate in a similar regulatory environment are combined.
The following is a description of the types of products and services from which each of the Company’s four reportable segments derives its revenues:
UnitedHealthcare includes the combined results of operations of UnitedHealthcare Employer & Individual, UnitedHealthcare Medicare & Retirement, UnitedHealthcare Community & State and UnitedHealthcare Global. The U.S. businesses share significant common assets, including a contracted network of physicians, health care professionals, hospitals and other facilities, information technology and consumer engagement infrastructure and other resources. UnitedHealthcare Employer & Individual offers an array of consumer-oriented health benefit plans and services for large national employers, public sector employers, mid-sized employers, small businesses and individuals nationwide. UnitedHealthcare Medicare & Retirement provides health care coverage and health and well-being

64


services to individuals age 50 and older, addressing their unique needs for preventive and acute health care services as well as services dealing with chronic disease and other specialized issues for older individuals. UnitedHealthcare Community & State’s primary customers oversee Medicaid plans, the Children’s Health Insurance Program and other federal, state and community health care programs. UnitedHealthcare Global is a diversified global health services business with a variety of offerings, including international commercial health and dental benefits and health care delivery.
OptumHealth focuses on care delivery, care management, wellness and consumer engagement, and health financial services. OptumHealth serves the physical, emotional and health-related financial needs of individuals, enabling population health through programs offered by employers, payers, government entities and directly with the care delivery system. OptumHealth offers access to networks of care provider specialists, health management services, care delivery, consumer engagement and financial services.
OptumInsight provides services, technology and health care expertise to major participants in the health care industry. Hospital systems, physicians, health plans, governments, life sciences companies and other organizations that comprise the health care industry depend on OptumInsight to help them improve performance, achieve efficiency, reduce costs, meet compliance mandates and modernize their core operating systems to meet the changing needs of the health system.
OptumRx offers pharmacy care services and programs, including retail network contracting, home delivery, specialty and community health pharmacy services, purchasing and clinical capabilities, and develops programs in areas such as step therapy, formulary management, drug adherence and disease/drug therapy management.
The Company’s accounting policies for reportable segment operations are consistent with those described in the Summary of Significant Accounting Policies (see Note 2). Transactions between reportable segments principally consist of sales of pharmacy care products and services to UnitedHealthcare customers by OptumRx, certain product offerings and care management and local care delivery services sold to UnitedHealthcare by OptumHealth, and health information and technology solutions, consulting and other services sold to UnitedHealthcare by OptumInsight. These transactions are recorded at management’s estimate of fair value. Transactions with affiliated customers are eliminated in consolidation. Assets and liabilities that are jointly used are assigned to each reportable segment using estimates of pro-rata usage. Cash and investments are assigned such that each reportable segment has working capital and/or at least minimum specified levels of regulatory capital.
As a percentage of the Company’s total consolidated revenues, premium revenues from CMS were 33%, 30% and 28% for 2019, 2018 and 2017, respectively, most of which were generated by UnitedHealthcare Medicare & Retirement and included in the UnitedHealthcare segment. U.S. customer revenue represented approximately 96% of consolidated total revenues for 2019, 2018 and 2017. Long-lived fixed assets located in the United States represented approximately 72% and 76% of the total long-lived fixed assets as of December 31, 2019 and 2018, respectively. The non-U.S. revenues and fixed assets are primarily related to UnitedHealthcare Global.

65


The following table presents the reportable segment financial information:
 
 
 
 
Optum
 
 
 
 
(in millions)
 
UnitedHealthcare
 
OptumHealth
 
OptumInsight
 
OptumRx
 
Optum Eliminations
 
Optum
 
Corporate and
Eliminations
 
Consolidated
2019
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenues - unaffiliated customers:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Premiums
 
$
183,783

 
$
5,916

 
$

 
$

 
$

 
$
5,916

 
$

 
$
189,699

Products
 

 
31

 
116

 
31,450

 

 
31,597

 

 
31,597

Services
 
8,922

 
5,732

 
3,630

 
689

 

 
10,051

 

 
18,973

Total revenues - unaffiliated customers
 
192,705

 
11,679

 
3,746

 
32,139

 

 
47,564

 

 
240,269

Total revenues - affiliated customers
 

 
17,966

 
6,239

 
42,093

 
(1,661
)
 
64,637

 
(64,637
)
 

Investment and other income
 
1,137

 
672

 
21

 
56

 

 
749

 

 
1,886

Total revenues
 
$
193,842

 
$
30,317

 
$
10,006

 
$
74,288

 
$
(1,661
)
 
$
112,950

 
$
(64,637
)
 
$
242,155

Earnings from operations
 
$
10,326

 
$
2,963

 
$
2,494

 
$
3,902

 
$

 
$
9,359

 
$

 
$
19,685

Interest expense
 

 

 

 

 

 

 
(1,704
)
 
(1,704
)
Earnings before income taxes
 
$
10,326

 
$
2,963

 
$
2,494

 
$
3,902

 
$

 
$
9,359

 
$
(1,704
)
 
$
17,981

Total assets
 
$
88,250

 
$
40,444

 
$
15,181

 
$
36,346

 
$

 
$
91,971

 
$
(6,332
)
 
$
173,889

Purchases of property, equipment and capitalized software
 
841

 
573

 
495

 
162

 

 
1,230

 

 
2,071

Depreciation and amortization
 
926

 
565

 
672

 
557

 

 
1,794

 

 
2,720

2018
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenues - unaffiliated customers:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Premiums
 
$
174,282

 
$
3,805

 
$

 
$

 
$

 
$
3,805

 
$

 
$
178,087

Products
 

 
52

 
111

 
29,438

 

 
29,601

 

 
29,601

Services
 
8,366

 
4,925

 
3,280

 
612

 

 
8,817

 

 
17,183

Total revenues - unaffiliated customers
 
182,648

 
8,782

 
3,391

 
30,050

 

 
42,223

 

 
224,871

Total revenues - affiliated customers
 

 
14,882

 
5,596

 
39,440

 
(1,409
)
 
58,509

 
(58,509
)
 

Investment and other income
 
828

 
481

 
21

 
46

 

 
548

 

 
1,376

Total revenues
 
$
183,476

 
$
24,145

 
$
9,008

 
$
69,536

 
$
(1,409
)
 
$
101,280

 
$
(58,509
)
 
$
226,247

Earnings from operations
 
$
9,113

 
$
2,430

 
$
2,243

 
$
3,558

 
$

 
$
8,231

 
$

 
$
17,344

Interest expense
 

 

 

 

 

 

 
(1,400
)
 
(1,400
)
Earnings before income taxes
 
$
9,113

 
$
2,430

 
$
2,243

 
$
3,558

 
$

 
$
8,231

 
$
(1,400
)
 
$
15,944

Total assets
 
$
82,938

 
$
29,837

 
$
11,039

 
$
33,912

 
$

 
$
74,788

 
$
(5,505
)
 
$
152,221

Purchases of property, equipment and capitalized software
 
761

 
593

 
517

 
192

 

 
1,302

 

 
2,063

Depreciation and amortization
 
845

 
439

 
654

 
490

 

 
1,583

 

 
2,428

2017
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenues - unaffiliated customers:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Premiums
 
$
154,709

 
$
3,744

 
$

 
$

 
$

 
$
3,744

 
$

 
$
158,453

Products
 

 
44

 
106

 
26,216

 

 
26,366

 

 
26,366

Services
 
7,890

 
4,013

 
2,849

 
565

 

 
7,427

 

 
15,317

Total revenues - unaffiliated customers
 
162,599

 
7,801

 
2,955

 
26,781

 

 
37,537

 

 
200,136

Total revenues - affiliated customers
 

 
12,429

 
5,127

 
36,954

 
(1,227
)
 
53,283

 
(53,283
)
 

Investment and other income
 
658

 
340

 
5

 
20

 

 
365

 

 
1,023

Total revenues
 
$
163,257

 
$
20,570

 
$
8,087

 
$
63,755

 
$
(1,227
)
 
$
91,185

 
$
(53,283
)
 
$
201,159

Earnings from operations
 
$
8,498

 
$
1,823

 
$
1,770

 
$
3,118

 
$

 
$
6,711

 
$

 
$
15,209

Interest expense
 

 

 

 

 

 

 
(1,186
)
 
(1,186
)
Earnings before income taxes
 
$
8,498

 
$
1,823

 
$
1,770

 
$
3,118

 
$

 
$
6,711

 
$
(1,186
)
 
$
14,023

Total assets
 
$
76,676

 
$
26,931

 
$
11,273

 
$
29,551

 
$

 
$
67,755

 
$
(5,373
)
 
$
139,058

Purchases of property, equipment and capitalized software
 
737

 
510

 
588

 
188

 

 
1,286

 

 
2,023

Depreciation and amortization
 
758

 
380

 
614

 
493

 

 
1,487

 

 
2,245




66


15.
Quarterly Financial Data (Unaudited)
Selected quarterly financial information for all quarters of 2019 and 2018 is as follows:  
 
 
For the Quarter Ended
(in millions, except per share data)
 
March 31
 
June 30
 
September 30
 
December 31
2019
 
 
 
 
 
 
 
 
Revenues
 
$
60,308

 
$
60,595

 
$
60,351

 
$
60,901

Operating costs
 
55,476

 
55,851

 
55,337

 
55,806

Earnings from operations
 
4,832

 
4,744

 
5,014

 
5,095

Net earnings
 
3,557

 
3,385

 
3,629

 
3,668

Net earnings attributable to UnitedHealth Group common shareholders
 
3,467

 
3,293

 
3,538

 
3,541

Net earnings per share attributable to UnitedHealth Group common shareholders:
 
 
 
 
 
 
 
 
Basic
 
3.62

 
3.47

 
3.73

 
3.74

Diluted
 
3.56

 
3.42

 
3.67

 
3.68

2018
 
 
 
 
 
 
 
 
Revenues
 
$
55,188

 
$
56,086

 
$
56,556

 
$
58,417

Operating costs
 
51,135

 
51,882

 
51,966

 
53,920

Earnings from operations
 
4,053

 
4,204

 
4,590

 
4,497

Net earnings
 
2,924

 
3,010

 
3,284

 
3,164

Net earnings attributable to UnitedHealth Group common shareholders
 
2,836

 
2,922

 
3,188

 
3,040

Net earnings per share attributable to UnitedHealth Group common shareholders:
 
 
 
 
 
 
 
 
Basic
 
2.94

 
3.04

 
3.31

 
3.16

Diluted
 
2.87

 
2.98

 
3.24

 
3.10



ITEM 9.
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
None.
ITEM 9A.
CONTROLS AND PROCEDURES
EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES
We maintain disclosure controls and procedures as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934 (Exchange Act) that are designed to provide reasonable assurance that information required to be disclosed by us in reports that we file or submit under the Exchange Act is (i) recorded, processed, summarized and reported within the time periods specified in SEC rules and forms; and (ii) accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure.
In connection with the filing of this Annual Report on Form 10-K, management evaluated, under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer, the effectiveness of the design and operation of our disclosure controls and procedures as of December 31, 2019. Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective at the reasonable assurance level as of December 31, 2019.
CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING
There have been no changes in our internal control over financial reporting during the quarter ended December 31, 2019 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.


67



Report of Management on Internal Control Over Financial Reporting as of December 31, 2019
Management of UnitedHealth Group Incorporated and Subsidiaries (the Company) is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rules 13a-15(f) and 15d-15(f) under the Securities Exchange Act of 1934. The Company’s internal control system is designed to provide reasonable assurance to our management and board of directors regarding the reliability of financial reporting and the preparation of consolidated financial statements for external purposes in accordance with generally accepted accounting principles. The Company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of consolidated financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company’s assets that could have a material effect on the consolidated financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Management assessed the effectiveness of the Company’s internal control over financial reporting as of December 31, 2019. In making this assessment, we used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control-Integrated Framework (2013). Based on our assessment and the COSO criteria, we believe that, as of December 31, 2019, the Company maintained effective internal control over financial reporting.
The Company’s independent registered public accounting firm has audited the Company’s internal control over financial reporting as of December 31, 2019, as stated in the Report of Independent Registered Public Accounting Firm, appearing under Item 9A.

68




REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the shareholders and the Board of Directors of UnitedHealth Group Incorporated and Subsidiaries:
Opinion on Internal Control over Financial Reporting
We have audited the internal control over financial reporting of UnitedHealth Group Incorporated and subsidiaries (the “Company”) as of December 31, 2019, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2019, based on criteria established in Internal Control - Integrated Framework (2013) issued by COSO.
We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated financial statements as of and for the year ended December 31, 2019, of the Company and our report dated February 14, 2020, expressed an unqualified opinion on those financial statements.
Basis for Opinion
The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Report of Management on Internal Control Over Financial Reporting as of December 31, 2019. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.
Definition and Limitations of Internal Control over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
/s/ DELOITTE & TOUCHE LLP
 
Minneapolis, Minnesota
February 14, 2020



69



ITEM 9B.
OTHER INFORMATION
None.
PART III
ITEM  10.
DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
DIRECTORS OF THE REGISTRANT
The following sets forth certain information regarding our directors as of February 14, 2020, including their name and principal occupation or employment:
William C. Ballard, Jr.
 
Valerie Montgomery Rice, M.D.
Former Of Counsel
Bingham Greenebaum Doll LLP
 
President and Dean
Morehouse School of Medicine
 
 
 
Richard T. Burke
 
John H. Noseworthy, M.D.
Lead Independent Director
UnitedHealth Group
 
Former Chief Executive Officer and President
Mayo Clinic
 
 
 
 
Timothy P. Flynn
 
Glenn M. Renwick
Retired Chair
KPMG International
 
Former Chairman and Chief Executive Officer
The Progressive Corporation
 
 
 
 
Stephen J. Hemsley
 
David S. Wichmann
Chair
UnitedHealth Group
 
Chief Executive Officer
UnitedHealth Group
 
 
 
 
Michele J. Hooper
 
Gail R. Wilensky, Ph.D.
President and Chief Executive Officer
The Directors’ Council
 
Senior Fellow
Project HOPE
 
 
 
 
F. William McNabb III
 
 
Former Chairman and Chief Executive Officer
The Vanguard Group, Inc.
 
 
Pursuant to General Instruction G(3) to Form 10-K and the Instruction to Item 401 of Regulation S-K, information regarding our executive officers is provided in Item 1 of Part I of this Annual Report on Form 10-K under the caption “Executive Officers of the Registrant.”
We have adopted a code of ethics applicable to our principal executive officer and other senior financial officers, who include our principal financial officer, principal accounting officer, controller and persons performing similar functions. The code of ethics, entitled Code of Conduct: Our Principles of Ethics and Integrity, is posted on our website at www.unitedhealthgroup.com. For information about how to obtain the Code of Conduct, see Part I, Item 1, “Business.” We intend to satisfy the SEC’s disclosure requirements regarding amendments to, or waivers of, the code of ethics for our senior financial officers by posting such information on our website indicated above.
The remaining information required by Items 401, 405, 406 and 407(c)(3), (d)(4) and (d)(5) of Regulation S-K will be included under the headings “Corporate Governance,” “Proposal 1-Election of Directors” and “Delinquent Section 16(a) Reports” in our definitive proxy statement for our 2020 Annual Meeting of Shareholders, and such required information is incorporated herein by reference.
ITEM  11.
EXECUTIVE COMPENSATION
The information required by Items 402 and 407(e)(4) and (e)(5) of Regulation S-K will be included under the headings “Executive Compensation,” “Director Compensation,” “Corporate Governance - Risk Oversight” and “Compensation Committee Interlocks and Insider Participation” in our definitive proxy statement for our 2020 Annual Meeting of Shareholders, and such required information is incorporated herein by reference.

70



ITEM  12.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED SHAREHOLDER MATTERS
Equity Compensation Plan Information
The following table sets forth certain information, as of December 31, 2019, concerning shares of common stock authorized for issuance under all of our equity compensation plans:
Plan category 
 
(a)
Number of securities
to be issued upon
exercise of
outstanding
options, warrants
and rights 
 
(b)
Weighted-average
exercise
price of
outstanding
options, warrants
and rights  
 
(c)
Number of securities
remaining available for
future issuance under
equity compensation
plans (excluding
securities reflected in
column (a))  
 
 
 
(in millions)
 
 
 
(in millions)
 
Equity compensation plans approved by shareholders (1)
 
31

 
$
169

 
37

(3) 
Equity compensation plans not approved by shareholders (2)
 

 

 

 
Total (2)
 
31

 
$
169

 
37

 
(1)
Consists of the UnitedHealth Group Incorporated 2011 Stock Incentive Plan, as amended and the UnitedHealth Group 1993 Employee Stock Purchase Plan, as amended.
(2)
Excludes 824,000 shares underlying stock options assumed by us in connection with acquisitions. These options have a weighted-average exercise price of $58 and an average remaining term of approximately 4 years. These options are administered pursuant to the terms of the plans under which the options originally were granted. No future awards will be granted under these acquired plans.
(3)
Includes 5 million shares of common stock available for future issuance under the 1993 Employee Stock Purchase Plan as of December 31, 2019, and 32 million shares available under the 2011 Stock Incentive Plan as of December 31, 2019. Shares available under the 2011 Stock Incentive Plan may become the subject of future awards in the form of stock options, stock appreciation rights, restricted stock, restricted stock units, performance awards and other stock-based awards.
The information required by Item 403 of Regulation S-K will be included under the heading “Security Ownership of Certain Beneficial Owners and Management” in our definitive proxy statement for our 2020 Annual Meeting of Shareholders, and such required information is incorporated herein by reference.
ITEM  13.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
The information required by Items 404 and 407(a) of Regulation S-K will be included under the headings “Certain Relationships and Transactions” and “Corporate Governance” in our definitive proxy statement for our 2020 Annual Meeting of Shareholders, and such required information is incorporated herein by reference.
ITEM  14.
PRINCIPAL ACCOUNTING FEES AND SERVICES
The information required by Item 9(e) of Schedule 14A will be included under the heading “Disclosure of Fees Paid to Independent Registered Public Accounting Firm” in our definitive proxy statement for our 2020 Annual Meeting of Shareholders, and such required information is incorporated herein by reference.

71



PART IV
ITEM  15.
EXHIBITS, FINANCIAL STATEMENT SCHEDULES
(a)
1. Financial Statements and Supplementary Data
The financial statements are included under Item 8 of this report:


2. Financial Statement Schedules
The following financial statement schedule of the Company is included in Item 15(c):
Schedule I - Condensed Financial Information of Registrant (Parent Company Only).
All other schedules for which provision is made in the applicable accounting regulations of the SEC are not required under the related instructions, are inapplicable, or the required information is included in the consolidated financial statements, and therefore have been omitted.
(b)
The following exhibits are filed or incorporated by reference herein in response to Item 601 of Regulation S-K. The Company files Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K pursuant to the Securities Exchange Act of 1934 under Commission File No. 1‑10864.
EXHIBIT INDEX**
3.1
 
3.2
 
4.1
 
4.2
 
4.3
 
4.4
 
4.5
 
*10.1
 
*10.2
 
*10.3
 

72

Table of Contents


*10.4
 
*10.5
 
*10.6
 
*10.7
 
*10.8
 
*10.9
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

73

Table of Contents


 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

74

Table of Contents


 
 
 
 
11.1
 
Statement regarding computation of per share earnings (incorporated by reference to the information contained under the heading “Net Earnings Per Common Share” in Note 2 of Notes to the Consolidated Financial Statements included in Part II, Item 8, “Financial Statements and Supplementary Data”)
 
 
 
 
 
101.INS
 
XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
101.SCH
 
Inline XBRL Taxonomy Extension Schema Document.
101.CAL
 
Inline XBRL Taxonomy Extension Calculation Linkbase Document.
101.DEF
 
Inline XBRL Taxonomy Extension Definition Linkbase Document.
101.LAB
 
Inline XBRL Taxonomy Extension Label Linkbase Document.
101.PRE
 
Inline XBRL Taxonomy Extension Presentation Linkbase Document.
104
 
Cover Page Interactive Data File (formatted as Inline XBRL and embedded within Exhibit 101).
________________________________________________
*
 
Denotes management contracts and compensation plans in which certain directors and named executive officers participate and which are being filed pursuant to Item 601(b)(10)(iii)(A) of Regulation S-K.
**
 
Pursuant to Item 601(b)(4)(iii) of Regulation S-K, copies of instruments defining the rights of certain holders of long-term debt are not filed. The Company will furnish copies thereof to the SEC upon request.
(c)
Financial Statement Schedule
Schedule I - Condensed Financial Information of Registrant (Parent Company Only).


75

Table of Contents


Schedule I

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the shareholders and the Board of Directors of UnitedHealth Group Incorporated and Subsidiaries:
Opinion on the Financial Statement Schedule
We have audited the consolidated financial statements of UnitedHealth Group Incorporated and Subsidiaries (the “Company”) as of December 31, 2019 and 2018, and for each of the three years in the period ended December 31, 2019, and the Company’s internal control over financial reporting as of December 31, 2019, and have issued our reports thereon dated February 14, 2020; such reports are included elsewhere in this Form 10-K. Our audits also included the financial statement schedule of the Company listed in the Index at Item 15. This financial statement schedule is the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statement schedule based on our audits. In our opinion, the financial statement schedule, when considered in relation to the consolidated financial statements taken as a whole, presents fairly, in all material respects, the information set forth therein.

/s/    DELOITTE & TOUCHE LLP
 
Minneapolis, Minnesota
February 14, 2020

76

Table of Contents


Schedule I
Condensed Financial Information of Registrant
(Parent Company Only)
UnitedHealth Group
Condensed Balance Sheets
 
(in millions, except per share data)
 
December 31,
2019
 
December 31,
2018
Assets
 
 
 
 
Current assets:
 
 
 
 
Cash and cash equivalents
 
$
46

 
$
434

Other current assets
 
787

 
197

Total current assets
 
833

 
631

Equity in net assets of subsidiaries
 
93,467

 
83,244

Long-term notes receivable from subsidiaries
 
5,079

 
4,461

Other assets
 
794

 
972

Total assets
 
$
100,173

 
$
89,308

 
 
 
 
 
Liabilities and shareholders’ equity
 
 
 
 
Current liabilities:
 
 
 
 
Accounts payable and accrued liabilities
 
$
688

 
$
618

Current portion of notes payable to subsidiaries
 
750

 
714

Commercial paper and current maturities of long-term debt
 
3,548

 
1,744

Total current liabilities
 
4,986

 
3,076

Long-term debt, less current maturities
 
35,926

 
33,490

Long-term notes payable to subsidiaries
 
1,314

 
560

Other liabilities
 
331

 
486

Total liabilities
 
42,557

 
37,612

Commitments and contingencies (Note 4)
 
 
 
 
Shareholders’ equity:
 
 
 
 
Preferred stock, $0.001 par value -10 shares authorized; no shares issued or outstanding
 

 

Common stock, $0.01 par value - 3,000 shares authorized; 948 and 960 issued and outstanding
 
9

 
10

Additional paid-in capital
 
7

 

Retained earnings
 
61,178

 
55,846

Accumulated other comprehensive loss
 
(3,578
)
 
(4,160
)
Total UnitedHealth Group shareholders’ equity
 
57,616

 
51,696

Total liabilities and shareholders’ equity
 
$
100,173

 
$
89,308


See Notes to the Condensed Financial Statements of Registrant

77

Table of Contents


Schedule I
Condensed Financial Information of Registrant
(Parent Company Only)
UnitedHealth Group
Condensed Statements of Comprehensive Income
 
 
 
For the Years Ended December 31,
(in millions)
 
2019
 
2018
 
2017
Revenues:
 
 
 
 
 
 
Investment and other income
 
$
209

 
$
194

 
$
527

Total revenues
 
209

 
194

 
527

Operating costs:
 
 
 
 
 
 
Operating costs
 
38

 
35

 

Interest expense
 
1,580

 
1,285

 
1,114

Total operating costs
 
1,618

 
1,320

 
1,114

Loss before income taxes
 
(1,409
)
 
(1,126
)
 
(587
)
Benefit for income taxes
 
293

 
251

 
214

Loss of parent company
 
(1,116
)
 
(875
)
 
(373
)
Equity in undistributed income of subsidiaries
 
14,955

 
12,861

 
10,931

Net earnings
 
13,839

 
11,986

 
10,558

Other comprehensive income (loss)
 
582

 
(1,517
)
 
14

Comprehensive income
 
$
14,421

 
$
10,469

 
$
10,572


See Notes to the Condensed Financial Statements of Registrant

78

Table of Contents


Schedule I
Condensed Financial Information of Registrant
(Parent Company Only)
UnitedHealth Group
Condensed Statements of Cash Flows
 
 
 
For the Years Ended December 31,
(in millions)
 
2019
 
2018
 
2017
Operating activities
 
 
 
 
 
 
Cash flows from operating activities
 
$
9,275

 
$
6,099

 
$
2,021

Investing activities
 
 
 
 
 
 
Issuances of notes to subsidiaries
 
(2,722
)
 
(1,420
)
 

Repayments of notes to subsidiaries
 
2,249

 
1,419

 
2,071

Cash paid for acquisitions
 
(9,645
)
 
(4,066
)
 
(2,313
)
Return of capital to parent company
 
4,497

 
4,196

 
3,375

Capital contributions to subsidiaries
 
(803
)
 
(1,259
)
 
(959
)
Other, net
 
490

 
4

 

Cash flows (used for) from investing activities
 
(5,934
)
 
(1,126
)
 
2,174

Financing activities
 
 
 
 
 
 
Common stock repurchases
 
(5,500
)
 
(4,500
)
 
(1,500
)
Proceeds from common stock issuances
 
1,037

 
838

 
688

Cash dividends paid
 
(3,932
)
 
(3,320
)
 
(2,773
)
Proceeds from (repayments of) commercial paper, net
 
300

 
(201
)
 
(3,508
)
Proceeds from issuance of long-term debt
 
5,444

 
6,935

 
5,291

Repayments of long-term debt
 
(1,750
)
 
(2,600
)
 
(3,472
)
Proceeds (repayments) of notes from subsidiaries
 
1,207

 
(1,127
)
 
1,704

Other, net
 
(535
)
 
(923
)
 
(446
)
Cash flows used for financing activities
 
(3,729
)
 
(4,898
)
 
(4,016
)
(Decrease) increase in cash and cash equivalents
 
(388
)
 
75

 
179

Cash and cash equivalents, beginning of period
 
434

 
359

 
180

Cash and cash equivalents, end of period
 
$
46

 
$
434

 
$
359

 
 
 
 
 
 
 
Supplemental cash flow disclosures
 
 
 
 
 
 
Cash paid for interest
 
$
1,506

 
$
1,294

 
$
1,062

Cash paid for income taxes
 
2,590

 
2,379

 
3,455

 
 
 
 
 
 
 
Supplemental schedule of non-cash investing activities
 
 
 
 
 
 
Common stock issued for acquisitions
 
$

 
$

 
$
2,164

Conversion of note receivable from subsidiaries to equity
 

 

 
4,378


See Notes to the Condensed Financial Statements of Registrant









79

Table of Contents


Schedule I
Condensed Financial Information of Registrant
(Parent Company Only)
UnitedHealth Group
Notes to Condensed Financial Statements
1.    Basis of Presentation
UnitedHealth Group’s parent company financial information has been derived from its consolidated financial statements and should be read in conjunction with the consolidated financial statements included in this Form 10-K. The accounting policies for the registrant are the same as those described in Note 2 of Notes to the Consolidated Financial Statements included in Part II, Item 8, “Financial Statements and Supplementary Data.”
2.    Subsidiary Transactions
Investment in Subsidiaries. UnitedHealth Group’s investment in subsidiaries is stated at cost plus equity in undistributed earnings of subsidiaries.
Dividends and Capital Distributions. Cash dividends received from subsidiaries and included in Cash Flows from Operating Activities in the Condensed Statements of Cash Flows were $5.6 billion, $5.6 billion and $3.4 billion in 2019, 2018 and 2017, respectively. Additionally, $4.5 billion, $4.2 billion and $3.4 billion in cash were received as a return of capital to the parent company during 2019, 2018 and 2017, respectively.
3.    Commercial Paper and Long-Term Debt
Discussion of commercial paper and long-term debt can be found in Note 8 of Notes to the Consolidated Financial Statements included in Part II, Item 8, “Financial Statements and Supplementary Data.” Long-term debt obligations of the parent company do not include other financing obligations at subsidiaries that totaled $1.2 billion and $1.3 billion at December 31, 2019 and 2018, respectively.
Maturities of commercial paper and long-term debt for the years ending December 31 are as follows:
(in millions)
 
 
2020
 
$
3,550

2021
 
3,150

2022
 
3,015

2023
 
2,125

2024
 
1,500

Thereafter
 
26,477


4. Commitments and Contingencies
For a summary of commitments and contingencies, see Note 12 of Notes to the Consolidated Financial Statements included in Part II, Item 8, “Financial Statements and Supplementary Data.”

ITEM  16.
FORM 10-K SUMMARY
None.


80

Table of Contents


SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Dated: February 14, 2020
 
UNITEDHEALTH GROUP INCORPORATED
 
 
By
/s/    DAVID S. WICHMANN
 
David S. Wichmann
Chief Executive Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.  
Signature
 
Title
 
Date
/s/ DAVID S. WICHMANN
 
Director and Chief Executive Officer
(principal executive officer)
 
February 14, 2020
David S. Wichmann
 
 
 
/s/ JOHN F. REX
 
Executive Vice President and Chief Financial Officer
(principal financial officer)
 
February 14, 2020
John F. Rex
 
 
 
/s/ THOMAS E. ROOS
 
Senior Vice President and
Chief Accounting Officer
(principal accounting officer)
 
February 14, 2020
Thomas E. Roos
 
 
 
*
 
Director
 
February 14, 2020
William C. Ballard, Jr.
 
 
 
 
*
 
Director
 
February 14, 2020
Richard T. Burke
 
 
 
 
*
 
Director
 
February 14, 2020
Timothy P. Flynn
 
 
 
 
*
 
Director
 
February 14, 2020
Stephen J. Hemsley
 
 
 
 
*
 
Director
 
February 14, 2020
Michele J. Hooper
 
 
 
 
*
 
Director
 
February 14, 2020
F. William McNabb III
 
 
 
 
*
 
Director
 
February 14, 2020
Valerie C. Montgomery Rice, M.D.
 
 
 
 
*
 
Director
 
February 14, 2020
John H. Noseworthy, M.D.
 
 
 
 
*
 
Director
 
February 14, 2020
Glenn M. Renwick
 
 
 
 
*
 
Director
 
February 14, 2020
Gail R. Wilensky, Ph.D.
 
 
 
 
 
*By
/s/    MARIANNE D. SHORT
 
Marianne D. Short,
As Attorney-in-Fact

81

Exhibit 4.5


Description of Common Stock
UnitedHealth Group Incorporated (the “Company”) has registered its common stock, par value $0.01 per share, under Section 12 of the Securities Exchange Act of 1934, as amended.
The Company is currently authorized under its certificate of incorporation to issue up to 3,000,000,000 shares of the common stock. As of January 31, 2020, 948,573,372 shares of common stock were outstanding.
Each share of common stock has the same relative rights and is identical in all respects to each other share of our common stock.
Holders of shares of common stock are entitled to one vote per share on all matters to be voted on by shareholders. Except with respect to the election of directors, each matter submitted to a vote of shareholders is decided by the affirmative vote of the holders of a majority of the voting power of the shares present and entitled to vote on that matter. Each director is elected by the vote of the majority of the votes cast with respect to such director, unless the number of director nominees exceeds the number of directors to be elected, in which event directors are elected by a plurality of the votes present and entitled to vote on the election of directors. Shareholders are not entitled to cumulate their votes for the election of directors.
The common stock is not redeemable, has no subscription or conversion rights and does not entitle the holders thereof to any preemptive rights to subscribe for any shares of any class or series of the Company’s capital stock, whether now or hereafter authorized, or for any obligations convertible into shares of any class or series of capital stock, whether now or hereafter authorized. The holders of common stock are entitled to receive such dividends, if any, as may be declared by the Company’s board of directors in its discretion out of funds legally available therefor. Subject to the rights of any preferred stock outstanding, upon liquidation or dissolution of the Company, the holders of common stock are entitled to receive on a pro rata basis all assets remaining for distribution to shareholders.
The Company’s certificate of incorporation and bylaws contain provisions that could have the effect of delaying or deferring a change in control of the Company, including provisions that:
afford the board of directors broad discretion to authorize undesignated preferred stock, which allows the board of directors to issue preferred stock with voting or other rights or preferences that could impede the success of any unsolicited attempt to change control of the Company;
provide that any vacancy on the board of directors may be filled only by the affirmative vote of a majority of the remaining directors then in office, and not by the shareholders; and
establish advance notice requirements for shareholders to nominate candidates for election as directors at any meeting of shareholders or to present any other business for consideration at any meeting of shareholders.
The common stock is listed on the New York Stock Exchange and trades under the symbol “UNH.” EQ Shareowner Services is the transfer agent and registrar for the common stock.
The above description of the common stock is a summary and is subject to and qualified in all respects by reference to the applicable provisions of the Company’s certificate of incorporation and bylaws and the relevant provisions of Delaware law. Copies of the certificate of incorporation and bylaws have been filed with the Securities and Exchange Commission.




Exhibit 10.17

UNITEDHEALTH GROUP
EXECUTIVE SAVINGS PLAN
(2020 Statement)
 
 
 
 
 



TABLE OF CONTENTS
 
 
Page
SECTION 1 INTRODUCTION AND DEFINITIONS
1
1.1
Statement of Plan
1
1.2
Definitions
1
1.3
Special Eligibility Rules
4
1.4
Special Transitional Rules under Section 409A of the Code
5
SECTION 2 ELIGIBILITY TO PARTICIPATE
6
2.1
Selection for Participation in the Plan
6
2.2
Enrollment Requirements
6
2.3
Special Eligibility Rule For Former Participants
7
2.4
Special Rule For Certain Employees of Acquired Companies
8
2.5
Termination of Participation
8
2.6
Special Rule for Overseas Employees
8
2.7
Treatment of Certain Transferred Participants
9
SECTION 3 401(K) RESTORATION OPTION PLAN
10
SECTION 4 INCENTIVE DEFERRAL OPTION AND SALARY DEFERRAL OPTION PLAN
11
4.1
Incentive Deferral Option (for Annual Awards)
11
4.2
Salary Deferral Option
11
4.3
Performance Award Deferral Option (for Long-Term Awards)
12
4.4
Employer Discretionary Supplements
13
4.5
Limitation on Deferrals
13
SECTION 5 CREDITS FROM MEASURING INVESTMENTS
13
5.1
Designation of Measuring Investments
13
5.2
UnitedHealth Group Stock as Measuring Investment
13
5.3
Operational Rules for Measuring Investments
13
SECTION 6 OPERATIONAL RULES
14
6.1
Operational Rules for Deferrals
14
6.2
Establishment of Accounts
14
6.3
Adjustment of Accounts
1
6.4
Accounting Rules
14
SECTION 7 VESTING OF ACCOUNTS
14
SECTION 8 SPENDTHRIFT PROVISION
14
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

i


SECTION 9 DISTRIBUTIONS
15
9.1
Time of Distribution to Participant
15
9.2
Form of Distribution
15
9.3
Election of Form of Distribution by Participant
17
9.4
Payment to Beneficiary Upon Death of Participant
19
9.5
Designation of Beneficiaries
20
9.6
Death Prior to Full Distribution
22
9.7
Facility of Payment
22
9.8
In-Service Distributions
23
9.9
Distributions in Cash
25
9.10
Rule Governing Distribution Elections
25
SECTION 10 FUNDING OF PLAN
25
10.1
Unfunded Plan
25
10.2
Corporate Obligation
25
SECTION 11 AMENDMENT AND TERMINATION
26
11.1
Amendment and Termination
26
11.2
Special Rule for Section 16 Officers
26
11.3
No Oral Amendments
26
11.4
Plan Binding on Successors
26
11.5
Certain Amendments
26
SECTION 12 DETERMINATIONS - RULES AND REGULATIONS
27
12.1
Determinations
27
12.2
Rules, Regulations and Procedures
27
12.3
Method of Executing Instruments
27
12.4
Original Claim
27
12.5
Limitations and Exhaustion
30
SECTION 13 PLAN ADMINISTRATION
31
13.1
Officers
31
13.2
Chief Executive Officer
31
13.3
Board of Directors
31
13.4
Executive Vice President & Chief Human Resources Officer
32
13.5
Delegation
32
13.6
Conflict of Interest
32
13.7
Administrator
33
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

ii


13.8
Service of Process
33
13.9
Expenses
33
13.10
Tax Withholding
33
13.11
Certifications
33
13.12
Errors in Computation or Payment
33
SECTION 14 CONSTRUCTION
34
14.1
Applicable Laws
34
14.2
Effect on Other Plans
34
14.3
Disqualification
34
14.4
Rules of Document Construction
35
14.5
Choice of Law
35
14.6
No Employment Contract
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UNITEDHEALTH GROUP
EXECUTIVE SAVINGS PLAN
(2020 Statement)

SECTION 1
INTRODUCTION AND DEFINITIONS

1.1     Statement of Plan. Effective January 1, 2004, UNITEDHEALTH GROUP INCORPORATED, a Delaware corporation (hereinafter sometimes referred to as “UnitedHealth Group”), as plan sponsor, and certain affiliated corporations (hereinafter together with UnitedHealth Group sometimes collectively referred to as the “Employers”), adopted the UnitedHealth Group Executive Savings Plan (2004 Statement) (the “2004 Statement”) in order to combine into one plan document the two nonqualified, unfunded, deferred compensation programs maintained by the Employers to defer the receipt of compensation which would otherwise be paid to those employees (collectively the “Plan”). The 2004 Statement was amended and restated in its entirety in the form of the UnitedHealth Group Executive Savings Plan (2019 Statement) (the “2019 Statement”), effective as of January 1, 2019, in order to incorporate all amendments that had been made to the 2004 Statement, and certain other amendments. The purpose of this UnitedHealth Group Executive Savings Plan (2020 Statement) is to update and restate the 2019 Statement and to make certain changes to the Plan, effective as of January 1, 2020.

1.2     Definitions. When the following terms are used herein with initial capital letters, they shall have the following meanings:

1.2.1.     Account - the separate bookkeeping account established for each Participant which represents the separate unfunded and unsecured general obligation of the Employers established with respect to each person who is a Participant in this Plan in accordance with Section 2 and to which are credited the dollar amounts specified in Sections 3, 4 and 5 and from which are subtracted payments made pursuant to Section 9. To the extent necessary to accommodate and effect the distribution elections made by Participants pursuant to Section 9.3 or Section 9.8.1, separate bookkeeping sub-accounts shall be established with respect to each of the several annual forms of distribution elections and specified date withdrawal elections made by Participants.

1.2.2.     Administrative Committee - the UnitedHealth Group Employee Benefits Plans Administrative Committee.

1.2.3.     Affiliate - a business entity which is not an Employer but which is part of a “controlled group” with the Employer or under “common control” with an Employer, as those terms are defined in section 414(b) and (c) of the Code (applying an eighty percent (80%) common ownership standard except for purposes of determining whether a Participant has incurred a Separation from Service requiring a distribution of the portion of a Participant’s Account attributable to deferred Base Salary that would otherwise have been paid in 2014 or later, and deferred Incentive Awards and Performance Awards that would otherwise have been paid in 2015 or later, for which purpose a fifty percent (50%) common ownership standard shall be applied in accordance with Treasury Regulation §1.409A-1(h)(3)). A business entity which is a predecessor to an Employer shall be treated as an Affiliate if the Employer maintains a plan of

1



such predecessor business entity or if, and to the extent that, such treatment is otherwise required by regulations under section 414(a) of the Code. A business entity shall also be treated as an Affiliate if, and to the extent that, such treatment is required by regulations under section 414(o) of the Code. In addition to said required treatment, the Executive Vice President & Chief Human Resources Officer may, in his or her discretion, designate as an Affiliate any business entity which is not such a “controlled group,” “common control” or “predecessor” business entity but which is otherwise affiliated with an Employer, subject to such limitations as the Executive Vice President & Chief Human Resources Officer may impose.

1.2.4.     Annual Valuation Date - each December 31.

1.2.5.     Base Salary - a Participant’s base or regular compensation, including vacation, sick leave, and certain other forms of paid time off, and any non-stock periodic incentive pay, but excluding short-term disability benefit payments, all forms of non-cash compensation, all Incentive Awards, and amounts paid in addition to base compensation, including by way of illustration but not limited to medical director fees, hospital pay and stipends, overtime, premium shift pay, bonuses, referral awards, and severance or separation pay. The Administrative Committee may include certain classes of compensation in, or exclude classes of compensation from, Base Salary, by action communicated to Participants.

1.2.6.     Beneficiary - a beneficiary designated by a Participant (or automatically by operation of the Plan Statement) to receive all or a part of the Participant’s Account in the event of the Participant’s death prior to full distribution thereof. A beneficiary so designated shall not be considered a Beneficiary until the death of the Participant.

1.2.7.     Board of Directors or Board - the Board of Directors of UnitedHealth Group or its successor. “Board of Directors” shall also mean and refer to any properly authorized committee of the Board of Directors.

1.2.8.     CEO - the Chief Executive Officer of UnitedHealth Group or his or her delegee for Plan purposes.

1.2.9.     Code - the Internal Revenue Code of 1986, as amended.

1.2.10. Effective Date - January 1, 2020. Except as otherwise provided herein, the benefits payable to any Participant who incurred a Separation from Service prior to January 1, 2020, shall be determined by the substantive terms of the Plan Statement as then in effect.

1.2.11.     Eligible Grade Level -

(a)
In General. For regular full-time or part-time employees: the Executive Leadership Team; the Senior Leadership Team; Salary Grades 31, 32, 91, and 92 (but only if base salary is equal to or exceeds any specific compensation criteria established by the Executive Vice President & Chief Human Resources Officer); Medical Director Grades M2, M3 and M4 (but only if base salary is equal to or exceeds any specific compensation criteria established by the Executive Vice President & Chief Human Resources Officer); and Sales Band SSL (but only if base salary is equal to or exceeds any specific compensation criteria established by the Executive Vice President & Chief Human Resources Officer).

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(b)
Authority to Make Changes. Notwithstanding the foregoing, the Executive Vice President & Chief Human Resources Officer may from time to time in his or her discretion modify the applicable eligible grade levels, the compensation criteria and the full-time and part-time criteria.

1.2.12. Employers - UnitedHealth Group; each business entity listed as an Employer in the Schedule I to this Plan Statement; any other business entity that employs persons who are selected for participation under Section 2.3 of in this Plan; and any successor thereof.

1.2.13.    ERISA - the Employee Retirement Income Security Act of 1974, as amended.

1.2.14.    Executive Vice President & Chief Human Resources Officer - the Executive Vice President & Chief Human Resources Officer of UnitedHealth Group, and his or her successors.

1.2.15.    Incentive Award - any annual incentive awards that are payable under the Rewarding Results Plan or Executive Incentive Plan, or any other annual incentive plan designated by the Executive Vice President & Chief Human Resources Officer.

1.2.16.    Participant - an employee of an Employer who is selected for participation in this Plan in accordance with the provisions of Section 2 and who either has been automatically enrolled under Section 3 or has elected to defer compensation under Section 4. An employee who has become a Participant shall continue to be a Participant in this Plan until the date of the Participant’s death or, if earlier, the date when the Participant has received a distribution of the Participant’s entire Account.

1.2.17.    Performance Award - any incentive awards that are payable under the Executive Incentive Plan for performance over a performance cycle of more than one year or under any other long-term incentive plan designated by the Executive Vice President & Chief Human Resources Officer.

1.2.18.    Plan - the two nonqualified, unfunded, deferred compensation programs maintained by the Employers for the benefit of Participants eligible to participate therein, as set forth in this Plan Statement: (1) the 401(k) Restoration Option Plan (which is attributable to credits to Accounts described in Section 3 for Plan Years ending on or before December 31, 2008), and (2) the Incentive Deferral and Salary Deferral Option Plan (which is attributable to credits to Accounts described in Section 4). (As used herein, “Plan” does not refer to the document pursuant to which the Plan is maintained. That document is referred to herein as the “Plan Statement”.) The Plan shall be referred to as the “UnitedHealth Group Executive Savings Plan.” The Plan consists of two distinct and mutually exclusive parts applicable to different benefits depending on when the benefit was earned under this Plan. These two (2) parts are:

(a)
2004 Executive Savings Plan or Post 2003 Executive Savings Plan. The part of the Plan that consists of all amounts deferred on or after January 1, 2004, including any deferrals of Incentive Awards earned in 2003 but payable in 2004.

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(b)
Legacy Executive Savings Plan. The part of the Plan that consists of all amounts deferred prior to January 1, 2004.

1.2.19.    Plan Statement - for purposes of the 2004 Executive Savings Plan (as described in Section 1.2.18(a)), “Plan Statement” means this document entitled “UnitedHealth Group Executive Savings Plan (2020 Statement)” as adopted by the Executive Vice President & Chief Human Resources Officer and generally effective as of January 1, 2019, as the same may be amended from time to time thereafter. For purposes of the Legacy Executive Savings Plan (as described in Section 1.2.18(b)), “Plan Statement” means the document entitled “UnitedHealth Group Executive Savings Plan (1998 Statement)” as adopted by the Senior Vice President Human Capital and generally effective as of January 1, 1998, as the same may be amended from time to time thereafter. The plan document for the UnitedHealth Group Executive Savings Plan consists of the Plan Statement for the 2020 Executive Savings Plan and the plan statement for the Legacy Executive Savings Plan. Notwithstanding the foregoing, the UnitedHealth Group Employee Benefits Committee has exercised its administrative authority under the Legacy Plan statement to provide that, except as otherwise provided herein, benefits accrued under the Legacy Plan will be administered in accordance with the Plan Statement in the same manner as benefits accrued under the 2004 Executive Savings Plan, the terms of this Plan Statement shall also apply to all benefits accrued under the Legacy Plan, except as otherwise provided in Section 9.2(c), 9.2(d), 9.3.4(c), 9.8.1(f), or any other provision that either by its terms is not applicable to amounts deferred under the Legacy Plan, or that if applied to amounts under the Legacy Plan would cause such amounts to become subject to section 409A of the Code.

1.2.20.    Plan Year - the twelve (12) consecutive month period ending on any Annual Valuation Date.

1.2.21.    Section 16 Officer - an officer of an Employer who is subject to the provisions of Section 16 of the Securities Exchange Act of 1934, as amended.

1.2.22.    Separation from Service - a severance of an employee’s employment relationship with the Employers and all Affiliates for any reason as defined in section 409A of the Code and Regulation § 1.409A-1(h). The Employers shall determine whether an employee has incurred a Separation from Service in accordance with section 409A of the Code and Regulation § 1.409A-1(h).

1.2.23.    Specified Employee - an employee who, as of the date of the employee’s Separation from Service, is a key employee of an Employer or an Affiliate within the meaning of section 409A of the Code and determined pursuant to procedures adopted by UnitedHealth Group.

1.2.24.    UnitedHealth Group - UNITEDHEALTH GROUP INCORPORATED, a Delaware corporation, or any successor thereto.

1.2.25.    Valuation Date - any day that the U.S. securities markets are open and conducting business.

1.3    Special Eligibility Rules.

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1.3.1.    Special Eligibility Rule for Certain Employees in the SBL Band. Effective January 1, 2003, UnitedHealth Group modified the Eligible Grade Levels. Any employee who (i) was deferring under the Legacy Executive Savings Plan in 2002, (ii) was transferred from Salary Grade 31 or 32 to the new SBL Sales Band in 2002 or 2003, and (iii) whose Base Salary equals or exceeds the compensation criteria level in effect for 2002, shall be considered to be eligible to continue to participate in the Legacy Executive Savings Plan for 2003 and in this Plan for 2004 and all subsequent Plan Years, provided (a) such employee remains in the SBL Sales Band or transfers to the SSL Sales Band, (b) such employee’s Base Salary for 2003 and all later years equals or exceeds the compensation criteria level in effect for 2002, and (c) such employee continuously elects to defer under the Legacy Executive Savings Plan for 2003 and this Plan for 2004 and later years. Any employee described in this Section 1.3.1 who declines to participate in the Legacy Executive Savings Plan for 2003 or this Plan for 2004 or any later year shall not be eligible to participate in this Plan for any subsequent Plan Year unless such employee enters an Eligible Grade Level and is selected for participation for a subsequent Plan Year by the Executive Vice President & Chief Human Resources Officer.

1.3.2.    Special Eligibility Rule for 2007. Effective for the Plan Year beginning January 1, 2007, UnitedHealth Group increased the compensation criteria for the Eligible Grade Levels (described in Section 1.2.11). Any employee (i) who was deferring under this Plan, the American Medical Security Nonqualified Executive Retirement Plan, the PacifiCare Health Systems, Inc. Statutory Restoration Plan or the PacifiCare Health Systems, Inc. Non-Qualified Deferred Compensation Plan in 2006, (ii) who remains in an eligible grade level, and (iii) whose Base Salary equals or exceeds the compensation criteria level in effect for 2006, shall be considered to be eligible to continue to participate in the Plan for 2007 and all subsequent Plan Years, provided (a) such employee remains in an eligible grade level, (b) such employee’s Base Salary for 2007 and all later years equals or exceeds the compensation criteria in effect for 2006, and (c) such employee continues to elect to defer under the Plan for 2007 and later years. Any employee described in this Section 1.3.2 who declines to participate in the Plan for 2007 or any later year shall not be eligible to participate in the Plan for any subsequent Plan Year unless such employee is in an Eligible Grade Level and is selected for participation for a subsequent Plan Year by the Executive Vice President & Chief Human Resources Officer.

1.4.    Special Transitional Rules under Section 409A of the Code. Under the special transitional rules under section 409A of the Code and related treasury regulations and guidance, UnitedHealth Group shall permit any Participant:

(i)
who was first eligible to participate in the Plan as of January 1, 2005, or who first became eligible to participate in the Plan during the 2005 Plan Year,

(ii)
who elected to defer under the Plan in 2005, and

(iii)
who continued to be employed by the Employer and all Affiliates on September 12, 2006
(iv)

to elect a different form of distribution for that portion of the Participant’s Account attributable to deferrals and matching credit (if any) for the 2006 Plan Year, including deferrals of incentive awards earned in 2006 and paid in 2007. To be effective, the new distribution election must be

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received by the Executive Vice President & Chief Human Resources Officer or his or her designee prior to December 31, 2006 (or such earlier deadline designated by the Executive Vice President & Chief Human Resources Officer). It is intended that any election made pursuant to this Section 1.4 shall not be treated as a change in the form or timing of payment under section 409A(a)(4) of the Code or an acceleration of payment under section 409A(a)(3) of the Code.
SECTION 2
ELIGIBILITY TO PARTICIPATE

2.1.    Selection for Participation in the Plan. Only employees who are in an Eligible Grade Level, who are selected for participation in this Plan by the Executive Vice President & Chief Human Resources Officer (or, for a Section 16 Officer, by the Board of Directors) and who are notified that they are selected for participation shall be eligible to become a Participant in this Plan. The Executive Vice President & Chief Human Resources Officer shall not select any employee for participation unless the Executive Vice President & Chief Human Resources Officer determines that such employee is a member of a select group of management or highly compensated employees (as that expression is used in ERISA).

2.2.    Enrollment Requirements. As a condition to participation, each selected employee who is eligible to participate in this Plan as of the first day of a Plan Year shall complete, execute and return to the Executive Vice President & Chief Human Resources Officer or his or her designee an election form prior to the first day of such Plan Year, or such earlier deadline as may be established by the Executive Vice President & Chief Human Resources Officer or his or her designee.

Notwithstanding the foregoing, a selected employee who first becomes eligible to participate in this Plan (and all other like-type plans of the Employers and all Affiliates which are required to be aggregated for purposes section 409A of the Code) after the first day of a Plan Year must complete these requirements with respect to deferrals of Base Salary within thirty (30) days after such employee first becomes eligible to participate in this Plan, or within such earlier deadline as may be established by the Executive Vice President & Chief Human Resources Officer, in his or her sole discretion, in order to participate for such period. In such event, such employee’s participation in this Plan shall commence as soon as administratively feasible after he or she elects to participate in this Plan, and such employee shall be permitted to defer under this Plan the portion of the employee’s Base Salary that is earned with respect to services performed on and after the employee’s participation commencement date. Effective January 1, 2020, such an employee shall not be eligible to defer any portion of his or her Incentive Award earned during the Plan Year that includes the participation commencement date.
Each selected employee who is eligible to participate in this Plan shall commence participation in this Plan only after the employee has met all enrollment requirements set forth in this Plan Statement and required by Executive Vice President & Chief Human Resources Officer, including returning all required documents to the Executive Vice President & Chief Human Resources Officer within the specified time period. Notwithstanding the foregoing, the Executive Vice President & Chief Human Resources Officer or his or her designee shall process such Participant’s deferral elections as soon as administratively feasible after such deferral elections

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are received by the Executive Vice President & Chief Human Resources Officer or his or her designee.
If an employee fails to meet all requirements contained in this Section 2.2 within the period required, that employee shall not be eligible to participate in this Plan during such Plan Year. For the avoidance of doubt, neither this Section 2.2 nor any other provision of this Section 2 shall be construed to permit a Participant who ceases to be an Eligible Employee and in a subsequent Plan Year again becomes an Eligible Employee to participate before the beginning of the Plan Year following the Plan Year in which he or she again becomes an Eligible Employee, unless the Participant is rehired following a termination of employment in which event Section 2.3 shall govern.
2.3.    Special Eligibility Rule For Former Participants. If a Participant terminates employment with the Employer and all Affiliates and such Participant is subsequently rehired by an Employer as an Eligible Employee, then:

(a)
If the Participant is rehired in the same Plan Year as the Plan Year in which the Participant terminated employment, then the Participant’s deferral elections for the Plan Year (if any) shall be automatically reinstated and shall apply to all compensation received after rehire (including Base Salary received in the remainder of the Plan Year and Incentive Awards earned during the Plan Year but paid in a subsequent Plan Year), or

(b)
If the Participant is rehired in a subsequent Plan Year, and is selected for participation in this Plan by the Executive Vice President & Chief Human Resources Officer (or, for a Section 16 Officer, by the Board of Directors), and either

(i)
has been paid all amounts deferred under this Plan (and all other like-type plans of the Employers and all Affiliates which are required to be aggregated for purposes of section 409A of the Code), and on and before the date of the last payment was not eligible to continue (or elect to continue) to participate in this Plan (and all other like-type plans of the Employers and all Affiliates which are required to be aggregated for purposes of section 409A of the Code) for periods after the last payment, or

(ii)
has not been eligible to participate in this Plan (or any other like-type plan of any Employer or Affiliate which is required to be aggregated with this Plan for purposes of section 409A of the Code) at any time during the twenty-four (24) month period ending on the date such employee is selected for participation in this Plan, other than by the accrual of earnings,

the Executive Vice President & Chief Human Resources Officer (or, for a Section 16 Officer, the Board of Directors) may designate that such employee shall be allowed to reenter the Plan as a Participant as of a fixed prospective date that is other than the first day of a Plan Year so long as that prospective date is within thirty (30) days of selection. Such employee shall be subject to the same enrollment requirements as any other selected employee who first becomes eligible to participate in this Plan after the first day of a Plan Year as provided in Section 2.2. A Participant

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whose employment is transferred to an Affiliate that has not adopted this Plan (or any other like-type plan which is required to be aggregated with this Plan for purposes of section 409A of the Code) and who otherwise meets the requirements of this Section 2.3 shall be treated as having terminated employment.
2.4.    Special Rule For Certain Employees of Acquired Companies. If an employee of any company that is acquired by an Employer or an Affiliate:
(a)
is employed in an Eligible Grade Level,

(b)
has not been eligible to participate in any account balance deferred compensation plan which is required to be aggregated with this Plan for purposes of section 409A of the Code (other than by the accrual of earnings) at any time during the twenty-four (24) month period ending on the date such employee is selected for participation in this Plan, and

(c)
is selected for participation in this Plan by the Executive Vice President & Chief Human Resources Officer (or, for a Section 16 Officer, by the Board of Directors),

the Executive Vice President & Chief Human Resources Officer (or, for a Section 16 Officer, the Board of Directors) may designate that such employee shall be allowed to enter the Plan as a Participant as of a fixed prospective date that is other than the first day of a Plan Year so long as that prospective date is within thirty (30) days of selection. Such employee shall be subject to the same enrollment requirements as any other selected employee who first becomes eligible to participate in this Plan after the first day of a Plan Year as provided in Section 2.2.
2.5.    Termination of Participation. If an employee selected for participation in this Plan for one Plan Year is not selected for a subsequent Plan Year, no further deferrals shall be made by or for such employee in that subsequent Plan Year. If an employee selected for participation in this Plan ceases to be a member of a select group of management or highly compensated employees (as that expression is used in ERISA), such employee’s deferral elections shall be cancelled as of the first day of the Plan Year beginning after such employee ceases to be a member of a select group of management or highly compensated employees; provided that any deferral election made with respect to an Incentive Award earned during a prior Plan Year will continue to apply even if the Incentive Award is payable after the first day of such Plan Year. In the event that a Participant is no longer eligible to defer compensation under this Plan, the Participant’s Account shall continue to be governed by the terms of this Plan Statement until such time as the Participant’s Account is paid in accordance with the terms of the Plan.

2.6.    Special Rule for Overseas Employees. If an employee is compensated by an Affiliate located outside of the United States, and such compensation is paid outside of the United States (an “Overseas Employee”), such employee shall not be eligible to participate in the Plan. If a Participant becomes an Overseas Employee, any compensation paid by such Affiliate shall not be included in his or her Incentive Award, Performance Award or Base Salary for purposes of Section 4, and the last sentence of Section 2.5 shall apply to such Participant as if he or she had ceased to be a member of a select group of management or highly compensated employees. If an otherwise eligible employee ceases to be an Overseas Employee during a Plan Year, and is or

8



becomes employed within the United States in an Eligible Grade Level, such employee shall be subject to the same enrollment requirements as any other selected employee who first becomes eligible to participate in this Plan after the first day of a Plan Year as provided in Section 2.2. Notwithstanding the foregoing, an employee who is compensated both by an Employer located within the United States and an Affiliate located outside of the United States during the same period, may continue to be, or, if otherwise eligible, may become, a Participant, but only compensation paid within the United States shall be included in his or her Incentive Award, Performance Award or Base Salary. For purposes of this Section 2.6, Puerto Rico, and any other territory or possession of the United States that is not subject to the Internal Revenue Code of 1986, shall be considered to be outside of the United States.
2.7.    Treatment of Certain Transferred Participants. Optum Medical Services, P.C. is a wholly owned indirect subsidiary of UnitedHealth Group, which sponsors the Optum Partner Services Executive Savings Plan (the “Optum ESP”), a nonqualified deferred compensation plan for the benefit of Optum Medical Services, P.C., and its respective affiliates, all of which are Affiliates as defined in this Plan. The following rules shall apply to transfers of employment between an Employer and any other Affiliate that occurs during a Plan Year:
(a)
If a participant in either this Plan or the Optum ESP is transferred during a Plan Year to the employ of any Employer or Affiliate that has adopted either this Plan or the Optum ESP as of the first day of the Plan Year (the “New Participating Employer”), then the deferral elections made under either this Plan or the Optum ESP shall be applied to compensation paid by the New Participating Employer as follows:
(i)
An election to defer Base Salary for the Plan Year in which such transfer occurs shall be treated as an election to defer the same percentage of the Participant’s Base Salary paid by the New Participating Employer under either this Plan or the Optum ESP for the balance of the Plan Year.
(ii)
An election to defer any incentive compensation paid with respect to a performance period of not more than one year, which performance period either coincides with or is contained with the Plan Year, shall be treated as an election to defer the same percentage of any incentive compensation plan sponsored by the New Participating Employer for a performance period of not more than one year which performance period either coincides with or is contained with the Plan Year, but only if, at the time the participant made the original deferral election he could have made an election to defer such incentive compensation consistent with section 409A (regardless of whether the Plan or Optum ESP would have permitted such an election).
(iii)
If the participant is participating in any long-term incentive plan with a performance period that exceeds one year, and is transferred during such performance period, any election to defer any long-term incentive compensation paid with respect to such performance period, shall be treated as an election to defer the same percentage of any long-term incentive compensation plan sponsored by the New Participating Employer for a performance period that ends on the same date as the original performance period, but only to the extent, at the

9



time the participant made the original deferral election he could have made an election to defer such incentive compensation consistent with section 409A (regardless of whether the Plan or Optum ESP would have permitted such an election).
(iv)
If the participant first became eligible to participate in the Plan or Optum ESP in the Plan Year in which the transfer occurs, and was permitted to make an election because of his initial eligibility, the rules described above shall apply to the remaining portion of the Plan Year, and whether the Employer or Affiliate to which the participant is transferred is a New Participating Employer shall be determined by whether the Employer or Affiliate had adopted either this Plan or the Optum ESP on the date of the participant’s initial eligibility.
(b)
Except as otherwise provided in (a), or as otherwise required by Section 409A of the Code, a participant’s deferral election shall not apply to any compensation paid by any Employer or Affiliate other than the Employer or Affiliate by which he was employed at the time the election was made, provided, however, that:
(i)
To the extent any form of incentive compensation with respect to which a Participant has made a deferral election becomes payable after the Participant’s employment has been transferred to another Employer or Affiliate, it shall be deferred as if the Participant had still been employed by an Employer at the time of payment.
(ii)
Nothing contained herein shall preclude the Administrative Committee (or, for a Section 16 Officer, the Board of Directors) from permitting an Eligible Employee to make a deferral election following a transfer of employment if such election would otherwise be permitted under Section 4.
(c)
Accounts representing compensation deferred under the Optum ESP of a person whose employment is transferred to an Employer may be transferred to this Plan, and the Account balance of a Participant whose employment is transferred to an Affiliate that participates in the Optum ESP may be transferred to the Optum ESP, in both cases in accordance with procedures, and subject to limitations, established by the Administrative Committee; provided, however, that such transfer shall have no effect on the time or form of payment of the amount transferred, except as otherwise permitted by section 409A of the Code.
SECTION 3
401(K) RESTORATION OPTION PLAN

The 401(k) Restoration Option Plan was eliminated effective for Plan Years beginning on or after January 1, 2009. Any amounts deferred under the 401(k) Restoration Option Plan for Plan Years beginning on or after January 1, 2004 and prior to January 1, 2009, and any matching credits on such deferrals shall continue to held in Participants’ Accounts under this Plan and shall be governed by the terms of this Plan Statement until such time as the Accounts are paid in accordance with the terms of the Plan.

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SECTION 3
INCENTIVE DEFERRAL OPTION AND
SALARY DEFERRAL OPTION PLAN

4.1.    Incentive Deferral Option (for Annual Awards).
4.1.1.    Amount of Deferrals. A Participant may elect to defer between (and including) 1% and 100% of such Participant’s Incentive Award (or may elect not to defer). To be effective for an Incentive Award paid during a Plan Year, the deferral election must be received by the Executive Vice President & Chief Human Resources Officer or his or her designee prior to the first day of the Plan Year in which the Incentive Award is earned. Such election shall be irrevocable for the Plan Year with respect to which it is made once it has been accepted by the Executive Vice President & Chief Human Resources Officer. Effective January 1, 2020, a Participant who first becomes eligible to participate in the Plan on or after the first day of a Plan Year, shall not be eligible to defer any portion of his or her Incentive Award earned during the Plan Year during which he or she becomes eligible to Participate.
4.1.2.    Crediting to Accounts. The Executive Vice President & Chief Human Resources Officer shall cause to be credited to the Account of each Participant the amount, if any, of such Participant’s voluntary deferrals of any Incentive Awards under Section 4.1.1. Such amount shall be credited as soon as administratively feasible after the day such Incentive Award would otherwise have been paid to the Participant, and shall be fully vested.
4.1.3.    Matching Credits. For Incentive Awards that are earned through the 2019 Plan Year (and paid in 2020), the Executive Vice President & Chief Human Resources Officer shall cause to be credited to the Account of each Participant an additional matching amount equal to 50% of the amount credited to such Participant’s Account under Section 4.1.2 above. For this purpose, however, deferrals at a rate exceeding 6% of the Participant’s Incentive Award shall be disregarded. Commencing with Incentive Awards earned in the 2020 Plan Year, matching amounts will be credited with respect to the portion of such Incentive Awards that is deferred if and only if the Executive Vice President & Chief Human Resources Officer, in his or her sole discretion, affirmatively declares that matching amounts shall be credited (and the amount of such matching amounts, if any). Such matching amounts shall be credited as soon as administratively feasible on or after the day the related deferral of the Incentive Award is credited, or in the case of Incentive Awards earned in 2020 and thereafter, as soon as administratively feasible after the Executive Vice President & Chief Human Resources Officer determines the amount of such matching contributions, if any, and in either case shall be fully vested (except as otherwise determined by the Executive Vice President & Chief Human Resources Officer in the case of matching contributions made with respect to Incentive Awards earned in 2020 and thereafter).
4.2    Salary Deferral Option.
4.2.1.    Amount of Deferrals. A Participant may elect to defer between (and including) 1% and 80% of such Participant’s Base Salary for a Plan Year (or may elect not to defer). To be effective for a Plan Year, the deferral election must be received by the Executive Vice President & Chief Human Resources Officer or his or her designee prior to the first day of the Plan Year (or such

11



earlier deadline designated by the Executive Vice President & Chief Human Resources Officer). Such election shall be irrevocable for the Plan Year with respect to which it is made once it has been accepted by the Executive Vice President & Chief Human Resources Officer. If a Participant first becomes eligible to participate in the Plan after the first day of such Plan Year, the Participant’s deferral election shall apply with respect to Base Salary paid for services to be performed after the deferral election is received by the Executive Vice President & Chief Human Resources Officer or his or her designee.
4.2.2.    Crediting to Accounts. The Executive Vice President & Chief Human Resources Officer shall cause to be credited to the Account of each Participant the amount, if any, of such Participant’s voluntary deferrals of salary or other pay under Section 4.2.1. Such amount shall be credited as soon as administratively feasible after the day such salary or other pay would otherwise have been paid to the Participant, and shall be fully vested.
4.2.3.    Matching Credits. Commencing with Base Salary paid in the 2020 Plan Year, matching amounts will be credited with respect to the portion of such Base Salary that is deferred if and only if the Executive Vice President & Chief Human Resources Officer, in his or her sole discretion, affirmatively declares that matching amounts shall be credited (and the amount of such matching amounts, if any). Such matching amounts shall be credited as soon as administratively feasible on or after the day the related deferral of the Base Salary is credited, or as soon as administratively feasible after the Executive Vice President & Chief Human Resources Officer determines the amount of such matching contributions, if any, and in either case shall be fully vested (except as otherwise determined by the Executive Vice President & Chief Human Resources Officer).
4.3    Performance Award Deferral Option (for Long-Term Awards).
4.3.1.    Amount of Deferrals. A Participant may elect to defer between (and including) 1% and 100% of such Participant’s Performance Award (or may elect not to defer). To the extent permitted under section 409A of the Code and related Regulations and guidance, the deferral election must be received by the Executive Vice President & Chief Human Resources Officer or his or her designee prior to the first day of the last Plan Year in the performance period (or any later deadline designated by the Executive Vice President which is at least six (6) months before the end of the performance period). Such election shall be irrevocable for the applicable performance period with respect to which it is made once it has been accepted by the Executive Vice President & Chief Human Resources Officer.
4.3.2.    Crediting to Accounts. The Executive Vice President & Chief Human Resources Officer shall cause to be credited to the Account of each Participant the amount, if any, of such Participant’s voluntary deferrals of any Performance Awards under Section 4.3.1. Such amount shall be credited as soon as administratively feasible after the day such Performance Award would otherwise have been paid to the Participant, and shall be fully vested.
4.3.3.    No Matching Credits. No matching amounts shall be credited for deferrals of Performance Awards under Section 4.3.1.

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4.4.    Employer Discretionary Supplements. Upon written notice to one or more Participants and to the Executive Vice President & Chief Human Resources Officer, the CEO (or, for any Section 16 Officer, the Board of Directors) may (but is not required to) determine that additional amounts shall be credited to the Accounts of such Participants. Such notice shall also specify the date of such crediting. Notwithstanding Section 7, such notice may also establish vesting rules for such amounts, in which case separate Accounts shall be established for such amounts for such Participants.
4.5    Limitation on Deferrals. Notwithstanding any other provision of this Plan Statement, any amount deferred by a Participant from any paycheck shall not exceed the amount that would accommodate current payment of all required withholdings from such paycheck.
SECTION 5
CREDITS FROM MEASURING INVESTMENTS
5.1    Designation of Measuring Investments. Through a voice response system (or other written or electronic means) approved by the Executive Vice President & Chief Human Resources Officer, each Participant shall designate the following “Measuring Investments,” which shall be used to determine the value of such Participant’s Account (until changed as provided herein):
(c)
One or more Measuring Investments for the current Account balance, and
(d)
One or more Measuring Investments for amounts that are credited to the Account in the future.
The Accounts and such Measuring Investments are specified solely as a device for computing the amount of benefits to be paid by the Employers under the Plan, and the Employers are not required to purchase such investments. The Measuring Investments shall be listed in the enrollment guide for the Plan. Participants may change the Measuring Investment designations for their Accounts as of any business date of the Plan Year.
5.2    UnitedHealth Group Stock as Measuring Investment. The Board of Directors may (but shall not be required to) determine that the Measuring Investments available for election by Participants will include deemed (but not actual) investment in the common stock of UnitedHealth Group, valued at the closing price of UnitedHealth Group common stock as reported on the New York Stock Exchange composite tape on the applicable Valuation Date.
5.3    Operational Rules for Measuring Investments. The Executive Vice President & Chief Human Resources Officer shall adopt rules specifying the Measuring Investments, the circumstances under which a particular Measuring Investment may be elected, or shall be automatically utilized, the minimum or maximum amount or percentage of an Account which may be allocated to a Measuring Investment, the procedures for making or changing Measuring Investment elections, the extent (if any) to which Beneficiaries of deceased Participants may make Measuring Investment elections and the effect of a Participant’s or Beneficiary’s failure to make an effective Measuring Investment election with respect to all or any portion of an Account. Notwithstanding the foregoing, any rules or revision with respect to deemed investment

13



in the common stock of UnitedHealth Group elections by a Section 16 Officer shall be made only by the Board of Directors.
SECTION 6
OPERATIONAL RULES
6.1    Operational Rules for Deferrals. Commencing with the elections made during the 2019 open enrollment period for the 2020 Plan Year, a Participant’s elections to defer compensation under Section 4 that are made for a Plan Year shall apply to such Plan Year and to any subsequent Plan Year, unless the terms of the election materials for such subsequent Plan Year specify that the prior Plan Year’s election shall not remain in effect, or the Participant makes an affirmative election for such Plan Year. Whether an election made in a prior enrollment period will apply to a subsequent Plan Year will be specified in the applicable election materials for such subsequent Plan Year. Deferral elections made prior to the 2019 open enrollment period were “evergreen” and intended to apply to all future Plan Years until changed; such elections shall not apply to the 2020 Plan Year or subsequent Plan Years unless affirmatively made as provided above. If a Participant’s pay after deferrals is not sufficient to cover pre-tax and after-tax benefit payroll deductions, and tax or other payroll withholding requirements, the Participant’s deferrals shall be reduced to the extent necessary to meet such requirements.
6.2    Establishment of Accounts. There shall be established for each Participant an unfunded, bookkeeping Account.
6.3    Adjustment of Accounts. The Executive Vice President & Chief Human Resources Officer shall cause the value of each Account to be increased (or decreased) from time to time for additions distributions, investment gains (or losses) and expenses charged to the Account.
6.4    Accounting Rules. The Executive Vice President & Chief Human Resources Officer may adopt (and revise) accounting rules for adjustment of the Accounts.
SECTION 7
VESTING OF ACCOUNTS
The Account of each Participant shall be fully (100%) vested and nonforfeitable at all times (except for any special vesting rules that apply to Employers discretionary supplements under Section 4.4).
SECTION 8
SPENDTHRIFT PROVISION
Participants and Beneficiaries shall have no power to transfer any interest in an Account nor shall any Participant or Beneficiary have any power to anticipate, alienate, dispose of, pledge or encumber the same while it is in the possession or control of the Employers, nor shall the Executive Vice President & Chief Human Resources Officer recognize any assignment thereof, either in whole or in part, nor shall the Account be subject to attachment, garnishment, execution following judgment or other legal process (including without limitation any domestic relations order, whether or not a “qualified domestic relations

14



order” under section 414(p) of the Code and section 206(d) of ERISA) before the Account is distributed to the Participant or Beneficiary.
The power to designate Beneficiaries to receive the Account of a Participant in the event of such Participant’s death shall not permit or be construed to permit such power or right to be exercised by the Participant so as thereby to anticipate, pledge, mortgage or encumber such Participant’s Account or any part thereof. Any attempt by a Participant to so exercise said power in violation of this provision shall be of no force and effect and shall be disregarded by the Executive Vice President & Chief Human Resources Officer.
SECTION 9
DISTRIBUTIONS
9.1    Time of Distribution to Participant.
9.1.1.    General Rule. Upon Participant’s Separation from Service, the Employer shall commence payment of such Participant’s Account (reduced by the amount of any applicable payroll, withholding and other taxes) in the form and at the time designated by the Participant pursuant to Section 9.3.
9.1.2.    No Application for Distribution Required. A Participant’s Account shall be distributed automatically following the Participant’s Separation from Service’. A Participant shall not be required to apply for distribution.
9.1.3.    Code § 162(m) Delay. If the Executive Vice President & Chief Human Resources Officer reasonably determines that if a Participant’s Account were distributed at the time otherwise provided in this Section 9, deduction of all or a portion of such distribution would not be permitted due to the application of section 162(m) of the Code (as in effect prior to January 1, 2018), distribution of such portion shall be deferred until the first year in which the Executive Vice President & Chief Human Resources Officer reasonably anticipates, or should reasonably anticipate, that the deduction of such payment will not be barred by application of section 162(m); provided that distributions of all such amounts under the Plan, or any other plan that must be aggregated with this Plan for purposes of section 409A of the Code, are so delayed. Where the payment is delayed to a date on or after the Participant’s Separation from Service, the payment will be considered a payment upon a separation from service for purposes of Section 9.2(d). No election may be provided to the service provider with respect to the timing of the payment under this Section 9.1.3.
9.1.4.    Effect of Reemployment. If a Participant is reemployed by the Employer or an Affiliate after Separation from Service,distribution of the Participant’s Account shall be made in the manner described in Section 9.2 and shall not be suspended as a result of Participant’s reemployment.
9.2    Form of Distribution. Distribution of the Participant’s Account shall be made in whichever of the following forms as the Participant shall have designated at the time of his or her enrollment (as described in Section 9.3):

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(a)
Lump Sum. In the form of a single lump sum. The amount of such distribution shall be determined as soon as administratively feasible as of a Valuation Date following the Plan Year in which the Participant experienced a Separation from Service, and shall be actually paid to the Participant as soon as practicable after such determination (but not later than the last day of the February following such Plan Year).
(b)
Installments. In the form of a series of five (5) or ten (10) annual installments. If a Participant elects to receive payments in the form of installments, then pursuant to section 409A of the Code and the regulations issued thereunder (and for purposes of the re-election provisions in Section 9.4.3), the series of installment payments shall be treated as the entitlement to a single payment (rather than a series of separate payments).
(i)
General Rule. The amount of the first installment will be determined as soon as administratively feasible as of a Valuation Date following the Plan Year in which the Participant experienced a Separation from Service, and shall be actually paid to the Participant as soon as practicable after such determination (but not later than the last day of the February following such Plan Year). The amount of future installments will be determined as soon as administratively feasible following the end of each later Plan Year. The amount of each installment shall be determined by dividing the Account balance as of the Valuation Date as of which the installment is being paid, by the number of remaining installment payments to be made (including the payment being determined). Such installments shall be actually paid as soon as practicable after each such determination (but not later than the last day of the February following such Plan Year).
(ii)
Exception for Small Amounts. This Section 9.2(b)(ii) shall apply only if the first installment is payable on or before December 31, 2018. Notwithstanding anything to the contrary in the other paragraphs of this Section 9, if:
(A)
at the time of the payment of the first installment of any distribution of installments from this Plan or any other account balance deferred compensation plan of Employers or an Affiliate, the combined value of (1) the Participant’s Account in this Plan as of the Valuation Date as of which such first installment is to be determined and (2) the Participant’s post-2004 accounts in all other account balance deferred compensation plans of the Employers or an Affiliate is determined to be equal to or less than the applicable dollar amount under Section 402(g)(1)(B) of the Code for the calendar year in which such first installment is paid, and
(B)
all such other account balance deferred compensation plans in which the Participant has an account provide for a mandatory small amount cashout of elective deferrals on the same basis as this Section 9.2(b)(ii),
then, the portion of the Participant’s Account in this Plan which is payable in the form of installments shall be distributed to the Participant in a lump sum as soon as practicable after such Valuation Date (but not later than the last day of the February following such Plan Year).

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(c)
Delayed Lump Sum. In the form of a single lump sum following the anniversary of the Participant’s Separation from Service, as elected by the Participant. Except as permitted under the provisions of Section 9.3.4, for amounts deferred through the 2019 Plan Year, the anniversary elected must be either the fifth (5th) or tenth (10) anniversary of the Participant’s Separation from Service. Commencing with amounts deferred in 2020 pursuant to the 2019 open enrollment period, the Participant may elect any anniversary of his or her Separation from Service from the first (1st) anniversary through the tenth (10th) anniversary. The amount of such distribution shall be determined as soon as administratively feasible as of a Valuation Date following the Plan Year in which occurs the elected anniversary of the Participant’s Separation from Service. Actual distribution shall be made as soon as administratively practicable after such determination (but not later than the last day of the February following the Plan Year in which occurs such elected anniversary).
(d)
Six-Month Delay. If, however, the Participant is a Specified Employee on the date of the Participant’s Separation from Service, distribution shall be delayed until the later of (i) the date otherwise provided above, or (ii) the earlier of (A) the first business day of the seventh month following the month in which occurs the Participant’s Separation from Service or (B) the date of the Participant’s death. All amounts that would otherwise have been paid prior to such date shall be paid as soon as practicable after such date, and the timing of payment of any subsequent installments shall be determined without regard to this Section 9.2(d). The provisions of this Section 9.2(d) shall not apply to the portion of a Participant’s Account (including the portion attributable to the Legacy Plan) that was deferred prior to December 31, 2004, and vested on December 31, 2004, including any earnings attributable to such portion.
9.3    Election of Form of Distribution by Participant.
9.3.1.    Initial Enrollment. Through a voice response system (or other written or electronic means) approved by the Executive Vice President & Chief Human Resources Officer, each Participant shall elect at the time of initial enrollment in the Plan whether distribution shall be made (as described in Section 9.2) in either (i) an immediate lump sum, (ii) five (5) or ten (10) annual installments, or (iii) a delayed lump sum following the anniversary of the Participant’s Separation from Service elected by the Participant (but not later than the tenth such anniversary). Such election shall apply with respect to distribution of that portion of the Participant’s Account attributable to deferrals and matching credits (if any) for the Participant’s initial year of participation in the Plan and any investment gains or losses on such deferrals and matching credits (if any). An initial distribution election shall apply to amounts deferred in a subsequent Plan Year, unless the terms of the election materials for such Plan Year specify that the prior year’s distribution election shall not remain in effect, or the Participant makes an affirmative election for such Plan Year pursuant to Section 9.3.3.
9.3.2.    Default Election of Form of Distribution. If a Participant fails to elect a form of distribution for any Plan Year, and no prior year election applies pursuant to Section 9.3.1 or 9.3.3, such Participant shall be deemed to have elected that distribution of amounts attributable to such Plan Year be made in an immediate lump sum as described in Section 9.2(a). For avoidance of doubt, if the terms of the election materials for a Plan Year specify that the prior

17



year election will not remain in effect for such Plan Year, this Section 9.3.2 shall apply unless the Participant makes an affirmative election.
9.3.3.    Separate Distribution Elections Permitted for Subsequent Plan Years. A Participant may elect a different form of distribution for that portion of the Participant’s Account attributable to deferrals and matching credits (if any) for each Plan Year with respect to which the Participant has elected to defer any type of compensation, and any investment gains or losses on such deferrals and matching credits (if any), regardless of whether the Participant has elected (or been deemed to elect) a different form of distribution for prior Plan Years. Through a voice response system (or other written or electronic means) approved by the Executive Vice President & Chief Human Resources Officer, a Participant may elect a separate form of distribution for that portion of the Participant’s Account attributable to deferrals and matching credits (if any) attributable to each Plan Year. To be effective for deferrals and matching credits (if any) for a Plan Year, a distribution election must be received by the Executive Vice President & Chief Human Resources Officer or his or her designee prior to the first day of the Plan Year (or such earlier deadline designated by the Executive Vice President & Chief Human Resources Officer). Distribution elections made for amounts deferred during the 2019 Plan Year shall not apply to amounts deferred in 2020 or subsequent Plan Years. Commencing with amounts deferred in 2020 pursuant to elections made during the 2019 open enrollment period, a distribution election made pursuant to this Section 9.3.3 shall apply to amounts deferred in a subsequent Plan Year, unless the terms of the election materials for such subsequent Plan Year specify that the prior year’s distribution election shall not remain in effect, or the Participant makes an affirmative election for such Plan Year pursuant to this Section 9.3.3.
9.3.4.    Re-Election of Form of Distribution. Through a voice response system (or other written or electronic means) approved by the Executive Vice President & Chief Human Resources Officer, the Participant may elect from time to time to change the form of payment for a specified portion of the Participant’s Account or to delay payment of a specified portion of the Participant’s Account. Each subsequent distribution election shall be effective as to the specified portion of the Participant’s Account. Notwithstanding the foregoing, any new distribution election shall be disregarded as if it had never been filed (and the prior distribution election shall be given effect) unless the distribution election:
(a)
is filed by a Participant while employed by the Employer or an Affiliate,
(b)
is filed with the Executive Vice President & Chief Human Resources Officer at least twelve (12) months before the Participant’s Separation from Service or death,
(c)
except in the case of the portion of the Participant’s Account attributable to the Legacy Plan, has the effect of delaying payment of the lump sum (or, in the case of installments which are treated as the entitlement to a single payment (and not a series of separate payments), the initial commencement date) under the prior election for at least five (5) years, and
(d)
shall not take effect until at least twelve (12) months after the date it is filed with the Executive Vice President & Chief Human Resources Officer.

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A Participant who makes an election pursuant to this Section 9.3.4 may not make another election with respect to the same portion of the Participant’s Account until twelve (12) months have elapsed since the prior election was made, and may not make more than two elections pursuant to this Section 9.3.4 with respect to the same portion of the Participant’s Account. The Executive Vice President & Chief Human Resources Officer may waive the foregoing limitations, and may impose additional limitations on elections made pursuant to this Section 9.3.4, including imposing limits on the maximum period of time that distributions may commence (or that the final installment payment may be made) following a participant’s Separation from Service. No spouse, former spouse, Beneficiary or other person shall have any right to participate in the Participant’s decision to revise distribution elections. Notwithstanding the foregoing, the Executive Vice President & Chief Human Resources Officer shall interpret all provisions of this Plan relating to the change of any distribution election in a manner that is consistent with section 409A of the Code and the regulations and other guidance issued thereunder. Accordingly, if the Executive Vice President & Chief Human Resources Officer determines that a requested revision to a distribution election is inconsistent with section 409A of the Code or other applicable tax law, the request shall not be effective.
The new form of distribution elected by the Participant must be a form that is permitted for initial elections pursuant to Section 9.2 at the time the new election is made. Notwithstanding the foregoing, a Participant may not make a new election with respect to the portion of the Participant’s Account (including the portion attributable to the Legacy Plan) that was deferred prior to December 31, 2004, and vested on December 31, 2004, including any earnings attributable to such portion, unless such election was permitted under the terms of the Plan Statement as in effect on October 3, 2004.
9.4    Payment to Beneficiary Upon Death of Participant.
9.4.1.    Payment to Beneficiary When Death Occurs Before Separation from Service. If a Participant dies before Separation from Service, such Participant’s Beneficiary will receive payment of the Participant’s Account at the same time and in the same form the Participant would have received if the Participant had experienced a Separation from Service on the date of death.
9.4.2.    Payment to Beneficiary When Death Occurs After Separation from Service. If a Participant dies after a Separation from Service, the Participant’s Beneficiary shall receive distribution of the Participant’s Account at the same time and in the same form the Participant would have received it if the Participant had survived.
9.4.3.    Beneficiary Not Required to Apply for Distribution. Distribution shall be made to the Beneficiary when the Administrative Committee receives notice of the Participant’s death, without the requirement of an application.
9.4.4.    Election of Measuring Investments by Beneficiaries. A Beneficiary of a deceased Participant shall generally have the same rights to designate Measuring Investments for the Participant’s Account that Participants have under Section 5. The Executive Vice President & Chief Human Resources Officer may adopt (and revise) rules to govern designations of

19



Measuring Investments by Beneficiaries. Unless changed by the Executive Vice President & Chief Human Resources Officer, the following rules shall apply:
(a)
The Measuring Investments for the Account of a deceased Participant shall not be changed until the Beneficiary so determines.
(b)
If a deceased Participant has more than one Beneficiary, the unanimous consent of all Beneficiaries shall be required to change Measuring Investments for such Participant’s Account.
9.5    Designation of Beneficiaries.
9.5.1.    Right to Designate. Each Participant may designate, upon forms to be furnished by and filed with the Executive Vice President & Chief Human Resources Officer (or through other means approved by the Executive Vice President & Chief Human Resources Officer), one or more primary Beneficiaries or alternative Beneficiaries to receive all or a specified part of such Participant’s Account in the event of such Participant’s death. The Participant may change or revoke any such designation from time to time without notice to or consent from any Beneficiary. No such designation, change or revocation shall be effective unless executed by the Participant and received by the Executive Vice President & Chief Human Resources Officer during the Participant’s lifetime.
9.5.2.    Failure of Designation. If a Participant:
(a)
fails to designate a Beneficiary,
(b)
designates a Beneficiary and thereafter revokes such designation without naming another Beneficiary, or
(c)
designates one or more Beneficiaries and all such Beneficiaries so designated fail to survive the Participant,
such Participant’s Account, or the part thereof as to which such Participant’s designation fails, as the case may be, shall be payable to the first class of the following classes of automatic Beneficiaries in which a member survives the Participant and (except in the case of surviving issue) in equal shares if there is more than one member in such class surviving the Participant:
(i)
Participant’s surviving spouse;
(ii)
Participant’s surviving issue per stirpes and not per capita;
(iii)
Participant’s surviving parents; and
(iv)
Representative of Participant’s estate.
9.5.3.    Disclaimers by Beneficiaries. A Beneficiary entitled to a distribution of all or a portion of a deceased Participant’s Account may disclaim an interest therein subject to the following requirements. To be eligible to disclaim, a Beneficiary must be a natural person, must not have

20



received a distribution of all or any portion of the Account at the time such disclaimer is executed and delivered, and must have attained at least age twenty-one (21) years as of the date of the Participant’s death. Any disclaimer must be in writing and must be executed personally by the Beneficiary before a notary public. A disclaimer shall state that the Beneficiary’s entire interest in the undistributed Account is disclaimed or shall specify what portion thereof is disclaimed. To be effective, duplicate original executed copies of the disclaimer must be both executed and actually delivered to the Executive Vice President & Chief Human Resources Officer after the date of the Participant’s death but not later than nine (9) months after the date of the Participant’s death. A disclaimer shall be irrevocable when delivered to the Executive Vice President & Chief Human Resources Officer. A disclaimer shall be considered to be delivered to the Executive Vice President & Chief Human Resources Officer only when actually received by the Executive Vice President & Chief Human Resources Officer. The Executive Vice President & Chief Human Resources Officer shall be the sole judge of the content, interpretation and validity of a purported disclaimer. Upon the filing of a valid disclaimer, the Beneficiary shall be considered not to have survived the Participant as to the interest disclaimed. A disclaimer by a Beneficiary shall not be considered to be a transfer of an interest in violation of any other provisions under this Plan. No other form of attempted disclaimer shall be recognized by the Executive Vice President & Chief Human Resources Officer.
9.5.4.    Definitions. When used herein and, unless the Participant has otherwise specified in the Participant’s Beneficiary designation, when used in a Beneficiary designation, “issue” means all persons who are lineal descendants of the person whose issue are referred to, subject to the following:
(a)
a legally adopted child and the adopted child’s lineal descendants always shall be lineal descendants of each adoptive parent (and of each adoptive parent’s lineal ancestors);
(b)
a legally adopted child and the adopted child’s lineal descendants never shall be lineal descendants of any former parent whose parental rights were terminated by the adoption (or of that former parent’s lineal ancestors); except that if, after a child’s parent has died, the child is legally adopted by a stepparent who is the spouse of the child’s surviving parent, the child and the child’s lineal descendants shall remain lineal descendants of the deceased parent (and the deceased parent’s lineal ancestors);
(c)
if the person (or a lineal descendant of the person) whose issue are referred to is the parent of a child (or is treated as such under applicable law) but never received the child into that parent’s home and never openly held out the child as that parent’s child (unless doing so was precluded solely by death), then neither the child nor the child’s lineal descendants shall be issue of the person.
“Child” means an issue of the first generation; “per stirpes” means in equal shares among living children of the person whose issue are referred to and the issue (taken collectively) of each deceased child of such person, with such issue taking by right of representation of such deceased child; and “survive” and “surviving” mean living after the death of the Participant.
9.5.5.    Special Rules. Unless the Participant has otherwise specified in the Participant’s Beneficiary designation, the following rules shall apply:


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(a)
If there is not sufficient evidence that a Beneficiary was living at the time of the death of the Participant, it shall be deemed that the Beneficiary was not living at the time of the death of the Participant.
(b)
The automatic Beneficiaries specified in Section 9.5.2 and the Beneficiaries designated by the Participant shall become fixed at the time of the Participant’s death so that, if a Beneficiary survives the Participant but dies before the receipt of all payments due such Beneficiary hereunder, such remaining payments shall be payable to the representative of such Beneficiary’s estate.
(c)
If the Participant designates as a Beneficiary the person who is the Participant’s spouse on the date of the designation, either by name or by relationship, or both, the dissolution, annulment or other legal termination of the marriage between the Participant and such person shall automatically revoke such designation. (The foregoing shall not prevent the Participant from designating a former spouse as a Beneficiary on a form executed by the Participant and received by the Executive Vice President & Chief Human Resources Officer after the date of the legal termination of the marriage between the Participant and such former spouse, and during the Participant’s lifetime.)
(d)
Any designation of a nonspouse Beneficiary by name that is accompanied by a description of relationship to the Participant shall be given effect without regard to whether the relationship to the Participant exists either then or at the Participant’s death.
(e)
Any designation of a Beneficiary only by statement of relationship to the Participant shall be effective only to designate the person or persons standing in such relationship to the Participant at the Participant’s death.
The Executive Vice President & Chief Human Resources Officer shall be the sole judge of the content, interpretation and validity of a purported Beneficiary designation.
9.6    Death Prior to Full Distribution. If, at the death of the Participant, any payment to the Participant was due or otherwise pending but not actually paid, the amount of such payment shall be included in the Account which is payable to the Beneficiary (and shall not be paid to the Participant’s estate).
9.7    Facility of Payment. In case of minority, incapacity or legal disability of a Participant or Beneficiary entitled to receive any distribution under this Plan, payment shall be made, if the Executive Vice President & Chief Human Resources Officer shall be advised of the existence of such condition:
(a)
to the court-appointed guardian or conservator of such Participant or Beneficiary, or
(b)
if there is no court-appointed guardian or conservator, to the lawfully authorized representative of the Participant or Beneficiary (and the Executive Vice President & Chief Human Resources Officer, in his or her sole discretion, shall determine whether a person is a lawfully authorized representative for this purpose), or


22



(c)
to an institution entrusted with the care or maintenance of the incapacitated or disabled Participant or Beneficiary, provided such institution has satisfied the Executive Vice President & Chief Human Resources Officer, in his or her sole discretion, that the payment will be used for the best interest and assist in the care of such Participant or Beneficiary, and provided further, that no prior claim for said payment has been made by a person described in (a) or (b) above.
Any payment made in accordance with the foregoing provisions of this section shall constitute a complete discharge of any liability or obligation of the Employers therefor.
9.8    In-Service Distributions.
9.8.1.    Specified Date Withdrawals. Each Participant shall have the opportunity, when enrolling in the Plan for each Plan Year, to elect one (1) or more specified date withdrawal dates for the total amount of the Participant’s Account attributable to deferral and matching credits (if any) for such Plan Year and any subsequent investment gains of losses on such deferrals and matching credits (if any), subject to the following rules:
(a)
Such election shall be made through a voice response system (or other written or electronic means) approved by the Executive Vice President & Chief Human Resources Officer.
(b)
No such distribution shall be made before January 1 of the calendar year that follows the third full Plan Year after the Participant was first eligible to elect a specified date withdrawal from that portion of the Participant’s Account attributable to deferrals and matching credits (if any) for such Plan Year and any subsequent investment gains or losses on such amounts (e.g., the earliest specified date withdrawal date for any deferrals made in 2020 is January 1, 2024).
(c)
A Participant may receive more than one (1) specified date withdrawal in any Plan Year but only if each distribution is attributable to deferrals and matching credits for different Plan Years. Only one (1) specified date withdrawal may be made in any Plan Year from that portion of the Participant’s Account attributable to deferrals and matching credits (if any) for the same Plan Year.
(d)
A Participant who elects a specified date withdrawal date and subsequently experiences a Separation from Service, will receive such specified date withdrawal, if the specified date withdrawal date is prior to the distribution of the Participant’s total Account.
(e)
Through a voice response system (or other written or electronic means) approved by the Executive Vice President & Chief Human Resources Officer, the Participant may elect to postpone any specified date withdrawal for at least five (5) years. A Participant who makes an election pursuant to this paragraph (e) may not make another election with respect to the same portion of the Participant’s Account until twelve (12) months have elapsed since the prior election was made, and may not make more than two elections pursuant to this paragraph (e) with respect to the same portion of the Participant’s Account. The Participant must file the election with the Executive Vice President & Chief Human Resources Officer at least twelve (12) months before the original scheduled

23



date of distribution. Such election shall not take effect until at least twelve (12) months after the date it is filed with the Executive Vice President & Chief Human Resources Officer.
(f)
A Participant may not cancel or make any change to the time or form of payment of a specified date withdrawal, except as permitted by Section 9.8.1(e). Notwithstanding the foregoing, a Participant may not make any change in the time or form of payment of a specified date withdrawal with respect to the portion of the Participant’s Account (including the portion attributable to the Legacy Plan) that was deferred prior to December 31, 2004, and vested on December 31, 2004, including any earnings attributable to such portion, unless such election was permitted under the terms of the Plan Statement as in effect on October 3, 2004.
(g)
The distribution amount shall be determined as soon as administratively feasible as of a Valuation Date on or after the specified date withdrawal date and shall be actually paid as soon as practicable after such determination.
9.8.2.    In-Service Distribution for Unforeseeable Emergency. A Participant who has incurred an unforeseeable emergency may request an in-service distribution while employed from the Participant’s Account if the Executive Vice President & Chief Human Resources Officer determines that such distribution is for one of the purposes described in (b) below and the conditions in (b) below have been satisfied.
(a)
Election. A Participant may elect in writing to receive distribution of all or a portion of the Participant’s Account prior to Separation from Service, to alleviate an unforeseeable emergency (as defined in (b) below). A Beneficiary of a deceased Participant may also request an early distribution for an unforeseeable emergency.
(b)
Unforeseeable Emergency Defined. For purposes of this Section, an “unforeseeable emergency” means a severe financial hardship to the Participant resulting from:
(i)
an illness or accident of the Participant, the Participant’s spouse, the Participant’s Beneficiary, or the Participant’s dependent (as defined in section 152 of the Code, without regard to sections 152(b)(1), 152(b)(2) and 152(d)(1)(B) of the Code),
(ii)
the loss of the Participant’s property due to casualty, or
(iii)
other similar extraordinary and unforeseeable emergency circumstances arising as a result of events beyond the control of the Participant.
Whether a Participant is faced with an unforeseeable emergency will be determined based on the relevant facts and circumstances. If a severe financial hardship is or may be relieved either (i) through reimbursement or compensation by insurance or otherwise, (ii) by liquidation of the Participant’s assets (to the extent the liquidation of such assets would not itself cause severe financial hardship),(iii) prior to January 1, 2019, by cessation of deferrals under this Plan (at the earliest possible date otherwise permitted under this Plan) or any 401(k) plan, then the hardship shall not constitute an unforeseeable emergency for purposes of this Plan. If a Beneficiary of a deceased

24



Participant requests an early distribution for an unforeseeable emergency, then the references in this definition to “Participant” shall be deemed to be references to such Beneficiary.
(c)
Distribution Amount. The amount of such distribution is limited to the amount reasonably necessary to satisfy the unforeseeable emergency, taking into account any tax payable upon the distribution. The amount of such distribution shall be determined as soon as administratively feasible following the receipt and approval of the request by the Executive Vice President & Chief Human Resources Officer or his or her designee and shall be actually paid as soon as administratively practicable after such determination. If the Participant has elected different times or forms of payment for deferrals from different Plan Years, the allocation of the distribution among Plan Years shall be as determined by the Administrator.
9.9    Distributions in Cash. All distributions from this Plan shall be made in cash.
9.10    Rule Governing Distribution Elections. The Administrative Committee may make, and revise from time to time, rules and procedures governing the election of distributions, which rules and procedures may limit the right of Participants or Beneficiaries to make and revise such elections. No Participant or Beneficiary shall be considered to have a vested right in the ability to make or revise elections governing the time or form of distribution.
SECTION 10
FUNDING OF PLAN
10.1    Unfunded Plan. The obligation of any Employer to make payments under the Plan constitutes only the unsecured (but legally enforceable) promises of that Employer to make such payments. No Participant shall have any lien, prior claim or other security interest in any property of any Employer. The Employers shall have no obligation to establish or maintain any fund, trust or account (other than a bookkeeping account) for the purpose of funding or paying the benefits promised under the Plan. If such a fund, trust or account is established, the property therein that is allocable to a particular Employer shall remain the sole and exclusive property of that Employer. The Employers shall be obligated to pay the cost of the Plan out of their general assets. All references to accounts, accruals, gains, losses, income, expenses, payments, custodial funds and the like are included merely for the purpose of measuring the obligation of the Employers to Participants in the Plan and shall not be construed to impose on the Employers the obligation to create any separate fund for purposes of the Plan.
10.2    Corporate Obligation. Neither any officer of any Employer nor the Executive Vice President & Chief Human Resources Officer in any way secures or guarantees the payment of any benefit or amount which may become due and payable hereunder to or with respect to any Participant. Each Participant and other person entitled at any time to payments hereunder shall look solely to the assets of such Participant’s Employer for such payments as an unsecured, general creditor. After benefits have been paid to or with respect to a Participant and such payment purports to cover in full the benefit hereunder, such former Participant or other person or persons, as the case may be, shall have no further right or interest in any other Plan assets. No

25



person shall be under any liability or responsibility for failure to effect any of the objectives or purposes of the Plan by reason of the insolvency of any of the Employers.
SECTION 11
AMENDMENT AND TERMINATION
11.1    Amendment and Termination. The Compensation and Human Resources Committee of the Board of Directors may unilaterally amend the Plan Statement prospectively, retroactively or both, at any time and for any reason deemed sufficient by it without notice to any person affected by this Plan and the Board of Directors may terminate this Plan both with regard to persons receiving benefits and persons expecting to receive benefits in the future; provided, however, that:
(a)
No Reduction or Delay. The benefit, if any, payable to or with respect to a Participant, whether or not the Participant has had a Separation from Service, as of the effective date of such amendment, shall not be, without the written consent of the Participant, diminished or delayed by such amendment.
(b)
Cash Lump Sum Payment. To the extent permissible under section 409A of the Code and related treasury regulations and guidance, if the Board of Directors terminates the Plan completely with respect to all Participants, the Board shall have the right, in its sole discretion, and notwithstanding any elections made by Participants, to immediately pay all benefits in a lump sum following such Plan termination.
11.2    Special Rule for Section 16 Officers. Notwithstanding anything in this Plan Statement to the contrary, the Executive Vice President & Chief Human Resources Officer may adopt rules to facilitate compliance with the rules and requirements of the Securities and Exchange Commission, including Section 16 of the Securities and Exchange Act of 1934, as amended, which rules may limit rights under this Plan for Section 16 Officers.
11.3    No Oral Amendments. No modification of the terms of the Plan Statement or termination of this Plan shall be effective unless it is in writing and signed on behalf of the Board of Directors by a person authorized to execute such writing. No oral representation concerning the interpretation or effect of the Plan Statement shall be effective to amend the Plan Statement.
11.4    Plan Binding on Successors. UnitedHealth Group shall require any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise of all or substantially all of the business and/or assets of UnitedHealth Group), by agreement, to expressly assume and agree to perform this Plan Statement in the same manner and to the same extent that UnitedHealth Group would be required to perform it if no such succession had taken place.
11.5    Certain Amendments. The Executive Vice President & Chief Human Resources Officer may unilaterally amend the Plan Statement to the same extent, and subject to the same limitations, as the Compensation and Human Resources Committee pursuant to Section 11.1; provided, however, that the Executive Vice President & Chief Human Resources Officer shall not adopt any amendment that would materially increase the cost of the Plan, or that is required to be adopted by the Board of Directors or the Compensation and Human Resources Committee in order to comply with the requirements of Section 162(m) of the Code or Section 16 of the

26



Securities Exchange Act of 1934. The determination by the Executive Vice President & Chief Human Resources Officer that he or she is authorized to adopt an amendment shall be presumed correct and any such amendment adopted by Executive Vice President & Chief Human Resources Officer shall be binding on all employees, Participants, Beneficiaries, and other persons claiming a benefit under the Plan.
SECTION 12
DETERMINATIONS - RULES AND REGULATIONS
12.1    Determinations. The Executive Vice President & Chief Human Resources Officer shall make such determinations as may be required from time to time in the administration of the Plan. The Executive Vice President & Chief Human Resources Officer shall have the discretionary authority and responsibility to interpret and construe the Plan Statement and to determine all factual and legal questions under the Plan, including but not limited to the entitlement of Participants and Beneficiaries, and the amounts of their respective interests. Each interested party may act and rely upon all information reported to them hereunder and need not inquire into the accuracy thereof, nor be charged with any notice to the contrary.
12.2    Rules, Regulations and Procedures. The Executive Vice President & Chief Human Resources Officer may adopt, and revise from time to time, such rules, regulations and procedures as it deems to be necessary or appropriate for the administration of the Plan. If any rule, regulation or procedure adopted by the Executive Vice President & Chief Human Resources Officer is inconsistent with any provision of the Plan that is administrative or ministerial in nature, including any provision of the Plan that relates to the time or manner for making any election or performing any action, the Plan shall be deemed amended to the extent of the inconsistency.
12.3    Method of Executing Instruments. Information to be supplied or written notices to be made or consents to be given by UnitedHealth Group, the Compensation and Human Resources Committee of the Board of Directors (the “Comp Committee”) or the Executive Vice President & Chief Human Resources Officer pursuant to any provision of the Plan Statement may be signed in the name of UnitedHealth Group, the Comp Committee or the Executive Vice President & Chief Human Resources Officer by any officer who has been authorized to make such certification or to give such notices or consents.
12.4    Original Claim. The claim procedures set forth in this Section 12.4 shall be the exclusive administrative procedure for the disposition of claims for benefits arising under the Plan.
12.4.1.    Initial Claim. An individual may, subject to any applicable deadline, file with the Executive Vice President & Chief Human Resources Officer (or, in the case of a Section 16 Officer, the Compensation and Human Resources Committee of the Board of Directors (the “Comp Committee”) a written claim for benefits under the Plan in a form and manner prescribed by the Executive Vice President & Chief Human Resources Officer.
(a)
If the claim is denied in whole or in part, the Executive Vice President & Chief Human Resources Officer (or, in the case of a Section 16 Officer, the Comp Committee) shall

27



notify the claimant of the adverse benefit determination within ninety (90) days after receipt of the claim.
(b)
The ninety (90) day period for making the claim determination may be extended for ninety (90) days if the Executive Vice President & Chief Human Resources Officer (or, in the case of a Section 16 Officer, the Comp Committee) determines that special circumstances require an extension of time for determination of the claim, provided that the Executive Vice President & Chief Human Resources Officer (or, in the case of a Section 16 Officer, the Comp Committee) notifies the claimant, prior to the expiration of the initial ninety (90) day period, of the special circumstances requiring an extension and the date by which a claim determination is expected to be made.
12.4.2.    Notice of Initial Adverse Determination. A notice of an adverse determination shall set forth in a manner calculated to be understood by the claimant:
(a)
the specific reasons for the adverse determination;
(b)
references to the specific provisions of the Plan Statement (or other applicable Plan document) on which the adverse determination is based;
(c)
a description of any additional material or information necessary to perfect the claim and an explanation of why such material or information is necessary; and
(d)
a description of the claim and review procedures, including the time limits applicable to such procedure, and a statement of the claimant’s right to bring a civil action under ERISA section 502(a) following an adverse determination on review.
12.4.3.    Request for Review. Within sixty (60) days after receipt of an initial adverse benefit determination notice, the claimant may file with the Comp Committee a written request for a review of the adverse determination and may, in connection therewith, submit written comments, documents, records and other information relating to the claim benefits. Any request for review of the initial adverse determination not filed within sixty (60) days after receipt of the initial adverse determination notice shall be untimely.
12.4.4.    Claim on Review. If the claim, upon review, is denied in whole or in part, the Comp Committee shall notify the claimant of the adverse benefit determination within sixty (60) days after receipt of such a request for review.
(a)
The sixty (60) day period for deciding the claim on review may be extended for sixty (60) days if the Comp Committee determines that special circumstances require an extension of time for determination of the claim, provided that the Comp Committee notifies the claimant, prior to the expiration of the initial sixty (60) day period, of the special circumstances requiring an extension and the date by which a claim determination is expected to be made.
(b)
In the event that the time period is extended due to a claimant’s failure to submit information necessary to decide a claim on review, the claimant shall have sixty (60) days within which to provide the necessary information and the period for making the

28



claim determination on review shall be tolled from the date on which the notification of the extension is sent to the claimant until the date on which the claimant responds to the request for additional information or, if earlier, the expiration of sixty (60) days.
(c)
The Comp Committee’s review of a denied claim shall take into account all comments, documents, records, and other information submitted by the claimant relating to the claim, without regard to whether such information was submitted or considered in the initial benefit determination.
12.4.5.    Notice of Adverse Determination for Claim on Review. A notice of an adverse determination for a claim on review shall set forth in a manner calculated to be understood by the claimant:
(a)
the specific reasons for the denial;
(b)
references to the specific provisions of the Plan Statement (or other applicable Plan document) on which the adverse determination is based;
(c)
a statement that the claimant is entitled to receive, upon request and free of charge, reasonable access to, and copies of, all documents, records, and other information relevant to the claimant’s claim for benefits;
(d)
a statement describing any voluntary appeal procedures offered by the Plan and the claimant’s right to obtain information about such procedures; and
(e)
a statement of the claimant’s right to bring an action under ERISA section 502(a).
12.4.6.    General Rules.
(a)
No inquiry or question shall be deemed to be a claim or a request for a review of a denied claim unless made in accordance with the established claim procedures. The Executive Vice President & Chief Human Resources Officer (or, in the case of a Section 16 Officer, the Comp Committee) may require that any claim for benefits and any request for a review of a denied claim be filed on forms to be furnished by The Executive Vice President & Chief Human Resources Officer (or, in the case of a Section 16 Officer, the Comp Committee) the upon request.
(b)
All decisions on original claims for all Participants except Participants who are Section 16 Officers shall be made by the Executive Vice President & Chief Human Resources Officer and all decisions on original claims for all Participants who are Section 16 Officers and all requests for a review of denied claims for all Participants shall be made by the Comp Committee.
(c)
Claimants may be represented by a lawyer or other representative at their own expense, but the Executive Vice President & Chief Human Resources Officer and the Comp Committee reserve the right to require the claimant to furnish written authorization and establish reasonable procedures for determining whether an individual has been

29



authorized to act on behalf of a claimant. A claimant’s representative shall be entitled to copies of all notices given to the claimant.
(d)
The decision of the Executive Vice President & Chief Human Resources Officer on a claim filed by a Participant who is not a Section 16 Officer and the decision of the Comp Committee on a claim filed by a Participant who is a Section 16 Officer or on a request for a review of a denied claim may be provided to the claimant in electronic form instead of in writing at the discretion of the Executive Vice President & Chief Human Resources Officer or the Comp Committee.
(e)
In connection with the review of a denied claim, the claimant or the claimant’s representative shall be provided, upon request and free of charge, reasonable access to, and copies of, all documents, records, and other information relevant to the claimant’s claim for benefits.
(f)
The time period within which a benefit determination will be made shall begin to run at the time a claim or request for review is filed in accordance with the claims procedures, without regard to whether all the information necessary to make a benefit determination accompanies the filing.
(g)
The claims and review procedures shall be administered with appropriate safeguards so that benefit claim determinations are made in accordance with governing plan documents and, where appropriate, the plan provisions have been applied consistently with respect to similarly situated claimants.
(h)
For the purpose of this Section, a document, record, or other information shall be considered “relevant” if such document, record, or other information: (i) was relied upon in making the benefit determination; (ii) was submitted, considered, or generated in the course of making the benefit determination, without regard to whether such document, record, or other information was relied upon in making the benefit determination; (iii) demonstrates compliance with the administration processes and safeguards designed to ensure that the benefit claim determination was made in accordance with governing plan documents and that, where appropriate, the Plan provisions have been applied consistently with respect to similarly situated claimants; and (iv) constitutes a statement of policy or guidance with respect to the Plan concerning the denied treatment option or benefit for the claimant’s diagnosis, without regard to whether such advice or statement was relied upon in making the benefit determination.
(i)
The Executive Vice President & Chief Human Resources Officer or the Comp Committee may, in its discretion, rely on any applicable statute of limitation or deadline as a basis for denial of any claim.
(j)
The Executive Vice President & Chief Human Resources Officer and the Comp Committee may permanently or temporarily delegate its responsibilities under this claim procedure to an individual or a committee of individuals.
12.5    Limitations and Exhaustion.

30



12.5.1    Limitations. No claim shall be considered under these administrative procedures unless it is filed with the Executive Vice President & Chief Human Resources Officer within one (1) year after the claimant knew (or reasonably should have known) of the principal facts on which the claim is based. Every untimely claim shall be denied by the Executive Vice President & Chief Human Resources Officer without regard to the merits of the claim. No legal action (whether arising under section 502 or section 510 of ERISA or under any other statute or non-statutory law) may be brought by any claimant on any matter pertaining to the Plans after the earlier of:
(a)
two (2) years after the claimant knew (or reasonably should have known) of the principal facts on which the claim is based, or
(b)
ninety (90) days after the claimant has exhausted these administrative procedures.
Knowledge of all facts that a Participant knew (or reasonably should have known) shall be imputed to each claimant who is or claims to be a Beneficiary of the Participant (or otherwise claims to derive an entitlement by reference to a Participant) for the purpose of applying the one (1) year and two (2) year periods.
12.5.2    Exhaustion Required. The exhaustion of these administrative procedures is mandatory for resolving every claim and dispute arising under the Plans. As to such claims and disputes:
(a)
no claimant shall be permitted to commence any legal action relating to any such claim or dispute (whether arising under section 502 or section 510 of ERISA or under any other statute or non-statutory law) unless a timely claim has been filed under these administrative procedures and these administrative procedures have been exhausted; and
(b)
in any such legal action all explicit and implicit determinations by the Executive Vice President & Chief Human Resources Officer and the Comp Committee (including, but not limited to, determinations as to whether the claim was timely filed) shall be afforded the maximum deference permitted by law.
SECTION 13
PLAN ADMINISTRATION
13.1    Officers. Except as hereinafter provided, functions generally assigned to UnitedHealth Group shall be discharged by its officers or delegated and allocated as provided herein.
13.2    Chief Executive Officer. Except as hereinafter provided, the CEO may delegate or redelegate and allocate and reallocate to one or more persons or to a committee of persons jointly or severally, and whether or not such persons are directors, officers or employees, such functions assigned to UnitedHealth Group generally hereunder as the CEO may from time to time deem advisable.
13.3    Board of Directors. Notwithstanding the foregoing, the Board of Directors shall have the authority to terminate the Plan and the exclusive authority to determine eligibility of Section 16 Officers to participate in this Plan under Section 2.

31



13.4    Executive Vice President & Chief Human Resources Officer. The Executive Vice President & Chief Human Resources Officer shall:
(a)
keep a record of all its proceedings and acts and keep all books of account, records and other data as may be necessary for the proper administration of the Plans; notify the Employers of any action taken by the Executive Vice President & Chief Human Resources Officer and, when required, notify any other interested person or persons;
(b)
determine from the records of the Employers the compensation, status and other facts regarding Participants and other employees;
(c)
prescribe forms to be used for distributions, notifications, etc., as may be required in the administration of the Plans;
(d)
set up such rules, applicable to all Participants similarly situated, as are deemed necessary to carry out the terms of this Plan Statement;
(e)
perform all other acts reasonably necessary for administering the Plans and carrying out the provisions of this Plan Statement and performing the duties imposed on it by the Board of Directors;
(f)
resolve all questions of administration of the Plans not specifically referred to in this section;
(g)
in accordance with regulations of the Secretary of Labor, provide adequate notice in writing to any claimant whose claim for benefits under the Plans has been denied, setting forth the specific reasons for such denial, written in a manner calculated to be understood by the claimant; and
(h)
delegate or redelegate to one or more persons, jointly or severally, and whether or not such persons are employees of the Employers, such functions assigned to the Executive Vice President & Chief Human Resources Officer hereunder as it may from time to time deem advisable.
If it so determines, the Board of Directors may create a committee and assign any or all duties, authority and responsibilities currently assigned to the Executive Vice President & Chief Human Resources Officer to such committee.
13.5    Delegation. The Board of Directors and the Executive Vice President & Chief Human Resources Officer shall not be liable for an act or omission of another person with regard to a responsibility that has been allocated to or delegated to such other person pursuant to the terms of the Plan Statement or pursuant to procedures set forth in the Plan Statement.
13.6    Conflict of Interest. If any individual to whom authority has been delegated or redelegated hereunder shall also be a Participant in either Plan, such Participant shall have no authority with respect to any matter specially affecting such Participant’s individual rights hereunder or the interest of a person superior to him or her in the organization (as distinguished from the rights of all Participants and Beneficiaries or a broad class of Participants and

32



Beneficiaries), all such authority being reserved exclusively to other individuals as the case may be, to the exclusion of such Participant, and such Participant shall act only in such Participant’s individual capacity in connection with any such matter.
13.7    Administrator. UnitedHealth Group shall be the administrator for purposes of section 3(16)(A) of ERISA.
13.8    Service of Process. In the absence of any designation to the contrary by the Executive Vice President & Chief Human Resources Officer, the General Counsel of UnitedHealth Group is designated as the appropriate and exclusive agent for the receipt of process directed to the Plans in any legal proceeding, including arbitration, involving the Plan.
13.9    Expenses. All expenses of administering the Plan shall be payable out of the trust fund established for the Plan except to the extent that the Employers, in their discretion, directly pay the expenses.
13.10    Tax Withholding. The Employer (or its delegee) shall withhold the amount of any federal, state or local income tax or other tax required to be withheld by the Employer under applicable law with respect to any amount payable under the Plan.
13.11    Certifications. Information to be supplied or written notices to be made or consents to be given by the Executive Vice President & Chief Human Resources Officer pursuant to any provision of this Plan Statement may be signed in the name of the Executive Vice President & Chief Human Resources Officer by any officer who has been authorized to make such certification or to give such notices or consents.
13.12    Errors in Computation or Payment. Neither UnitedHealth Group or the Employer shall be liable or responsible for any error in the computation of the Account or the determination of any benefit payable to or with respect to any Participant resulting from any misstatement of fact made by the Participant or by or on behalf of any survivor to whom such benefit shall be payable, directly or indirectly, to the Employer and used by the Executive Vice President & Chief Human Resources Officer in determining the benefit. The Executive Vice President & Chief Human Resources Officer shall not be obligated or required to increase the benefit payable to or with respect to such Participant which, on discovery of the misstatement, is found to be understated as a result of such misstatement of the Participant. However, the benefit of any Participant which is overstated by reason of any such misstatement or any other reason shall be reduced to the amount appropriate in view of the truth (and to recover any prior overpayment). To the extent that any Participant or Beneficiary erroneously receives a payment under the Plan that is in excess of the amount that should have been paid (regardless of whether such error resulted from a misstatement by the Participant or Beneficiary, the Participant or Beneficiary shall be required to return the amount of the excess, and the Plan may take any action necessary or appropriate to recover the amount of the excess, including bringing an action against the Participant or Beneficiary, and the person receiving such excess shall be deemed to hold the excess (and any proceeds thereof) in trust for the Plan.

33



SECTION 14
CONSTRUCTION
14.1    Applicable Laws.
14.1.1    Separate Plans. For purposes of state taxation of benefits under the Plan, the Plan consists of two separate plans: (1) the 401(k) Restoration Option Plan, and (2) the Incentive Deferral and Salary Deferral Option Plan. The purpose of the Plans is to provide retirement income to Participants.
14.1.2    ERISA Status. The Plan is maintained with the understanding that the Plan is an unfunded plan maintained primarily for the purpose of providing deferred compensation for a select group of management or highly compensated employees as provided in section 201(2), section 301(3) and section 401(a)(1) of ERISA. Each provision shall be interpreted and administered accordingly. If any individually contracted supplemental retirement arrangement with any Section 16 Officer is deemed to be covered by ERISA, such arrangement shall be included in the Incentive Deferral Option and Salary Deferral Option Plan but only to the extent that such inclusion is necessary to comply with ERISA.
14.1.3    IRC Status. This Plan is intended to be a nonqualified deferred compensation arrangement. The rules of section 401(a) et. seq. of the Code shall not apply to this Plan. The rules of section 3121(v) and section 3306(r)(2) of the Code shall apply to this Plan. The rules of section 409A of the Code shall apply to this Plan to the extent applicable and this Plan Statement shall be construed and administered accordingly. It is expressly intended that for purposes of section 409A of the Code this Plan be considered an account balance plan that consists of amounts deferred at the election of the service provider and amounts deferred other than at the election of the service provider. Notwithstanding the foregoing, neither the Employer nor any of its officers, directors, agents or affiliates shall be obligated, directly or indirectly, to any Participant or any other person for any taxes, penalties, interest or like amounts that may be imposed on the Participant or other person on account of any amounts under this Plan or on account of any failure to comply with any Code section.
14.1.4    Securities Laws Compliance. If any security of UnitedHealth Group is offered as a Measuring Investment under the Plan, then decisions assigned in this Plan Statement to the Executive Vice President & Chief Human Resources Officer shall instead by made by the Board of Directors to the extent any such decision could affect the interest of any Section 16 Officer in securities of UnitedHealth Group, including without limitation any change in Valuation Dates.
14.1.5    References to Laws. Any reference in the Plan Statement to a statute or regulation shall be considered also to mean and refer to any subsequent amendment or replacement of that statute or regulation.
14.2    Effect on Other Plans. This Plan Statement shall not alter, enlarge or diminish any person’s employment rights or obligations or rights or obligations under any other employee pension benefit or employee welfare benefit plan.
14.3    Disqualification. Notwithstanding any other provision of the Plan Statement or any election or designation made under the Plan, any potential Beneficiary who feloniously and

34



intentionally kills a Participant shall be deemed for all purposes of the Plan and all elections and designations made under the Plan to have died before such Participant. A final judgment of conviction of felonious and intentional killing is conclusive for this purpose. In the absence of a conviction of felonious and intentional killing, the Executive Vice President & Chief Human Resources Officer shall determine whether the killing was felonious and intentional for this purpose.
14.4    Rules of Document Construction.
(a)
Whenever appropriate, words used herein in the singular may be read in the plural, or words used herein in the plural may be read in the singular; the masculine may include the feminine; and the words “hereof,” “herein” or “hereunder” or other similar compounds of the word “here” shall mean and refer to the entire Plan Statement and not to any particular paragraph or Section of the Plan Statement unless the context clearly indicates to the contrary.
(b)
The titles given to the various Sections of the Plan Statement are inserted for convenience of reference only and are not part of the Plan Statement, and they shall not be considered in determining the purpose, meaning or intent of any provision hereof.
(c)
Notwithstanding anything apparently to the contrary contained in the Plan Statement, the Plan Statement shall be construed and administered to prevent the duplication of benefits provided under the Plans and any other qualified or nonqualified plan maintained in whole or in part by the Employers.
14.5    Choice of Law. This instrument has been executed and delivered in the State of Minnesota and has been drawn in conformity to the laws of that State and shall, except to the extent that federal law is controlling, be construed and enforced in accordance with the laws of the State of Minnesota. Any legal action with respect to the Plan must be brought in the United States District Court for the District of Minnesota, and shall be governed by the procedural and substantive laws of the State of Minnesota to the extent such laws are not preempted by ERISA, notwithstanding any conflict of laws principles. Each Participant, by agreeing to participate in the Plan, consents to the jurisdiction of such court and to the transfer of any action brought in any other court to the venue of such court, and waives any objection based on the doctrine of forum non conveniens or any related doctrine.
14.6    No Employment Contract. This Plan Statement is not and shall not be deemed to constitute a contract of employment between any Employer and any person, nor shall anything herein contained be deemed to give any person any right to be retained in the employ of the Employer or in any way limit or restrict any such Employer’s right or power to discharge any person at any time and to treat any person without regard to the effect which such treatment might have upon him or her as a Participant in the Plan. Neither the terms of the Plan Statement nor the benefits under the Plan nor the continuance of the Plan shall be a term of the employment of any employee. The Employer shall not be obliged to continue the Plans.



35



Dated: December 26, 2019
UNITEDHEALTH GROUP INCORPORATED
 
 
 
 
 
 
 
By:
/s/ Patricia Lewis
 
Patricia Lewis
 
Executive Vice President & Chief Human Resources Officer


36



SCHEDULE I
EMPLOYERS PARTICIPATING
IN THE
UNITEDHEALTH GROUP EXECUTIVE SAVINGS PLAN
Effective as of January 1, 2019

U.S. Domestic Corporations
1.    United HealthCare Services, Inc.
2.    UHC International Services, Inc.
3.    Health Plan of Nevada, Inc.
4.    Sierra Health and Life Insurance Company, Inc.
5.    Southwest Medical Associates, Inc.
6.    Optum Services, Inc.
7.    Optum360 Services, Inc.
8.    PrimeCare Medical Network, Inc.
9.    Monarch Health Plan Inc.
10.    UnitedHealthcare of Illinois, Inc.
11.    Optum Care, Inc.


37

Exhibit 10.18

UHGDIRECTORCOMPSUMMARYA06.JPG
Our compensation and benefit program is designed to compensate our non-employee directors fairly for work required for a company of our size and scope, and align their interests with the long-term interests of our shareholders. Director compensation reflects our desire to attract, retain and use the expertise of highly qualified people serving on the Company’s Board of Directors. The Compensation and Human Resources Committee reviews the compensation level of our non-employee directors on an annual basis and makes recommendations to the Board of Directors.
The Company uses annual retainers, equity-based compensation, expense reimbursement and other forms of compensation, as appropriate, to attract and retain non-employee directors.
Cash Compensation
Non-employee directors receive an annual cash retainer of $125,000. We pay an additional annual cash retainer of $270,000 to the Non-Executive Chair of the Board, an additional annual cash retainer of $75,000 to the Lead Independent Director, an additional annual cash retainer of $25,000 to the Chair of the Audit Committee, and additional annual cash retainers of $20,000 to the Chair of the Compensation and Human Resources Committee, the Chair of the Nominating and Corporate Governance Committee and the Chair of the Public Policy Strategies and Responsibility Committee.
Cash retainers are payable on a quarterly basis in arrears on the first business day following the end of each fiscal quarter, and subject to pro-rata adjustment if the director did not serve the entire quarter. Directors may elect to receive deferred stock units (“DSUs”) or common stock (if the director has met the stock ownership guidelines) in lieu of their cash compensation or may defer receipt of their cash compensation to a later date pursuant to the Directors' Compensation Deferral Plan ("Director Deferral Plan").
Equity-Based Compensation
Non-employee directors receive annual grants of DSUs under the 2011 Stock Incentive Plan, as amended, having an annual aggregate fair value of $205,000, subject to rounding adjustments described below. The grants are issued quarterly in arrears on the first business day following the end of each fiscal quarter and prorated if the director did not serve the entire quarter. The number of DSUs granted is determined by dividing $51,250 (the quarterly value of the annual equity award) by the closing stock price on the grant date, rounded up to the nearest share.
The DSUs immediately vest upon grant and must be retained until completion of the director’s service on the Board of Directors. Upon completion of service, the DSUs convert into an equal number of shares of the Company’s common stock. A director may defer receipt of the shares for up to ten years after completion of service pursuant to the Director Deferral Plan. Non-employee directors who have met their stock ownership requirement may elect to receive common stock in lieu of DSUs and/or in-service distributions on pre-selected dates.

Effective November 8, 2019


Exhibit 10.18


If a director elects to convert his or her cash compensation into DSUs, such conversion grants are made on the day the eligible cash compensation becomes payable to the director and immediately vest upon grant. The director receives the number of DSUs equal to the cash compensation foregone, divided by the closing price of our common stock on the date of grant, rounded up to the nearest share. A director may only elect to receive common stock if he or she has met the stock ownership guidelines.
The Company pays dividend equivalents in the form of additional DSUs on all outstanding DSUs. Dividend equivalents are paid at the same rate and at the same time that dividends are paid to Company shareholders and are subject to the same vesting conditions as the underlying grant.
Director Deferral Plan
Under the Director Deferral Plan, subject to compliance with applicable laws, non-employee directors may elect annually to defer receipt of all or a percentage of their compensation. Amounts deferred are credited to a bookkeeping account maintained for each director participant that uses a collection of unaffiliated mutual funds as measuring investments. Subject to certain additional rules set forth in the Director Deferral Plan, a participating director may elect to receive the distribution in one of the following ways:
a series of five or ten annual installments following the completion of his or her service on the Board of Directors;
a delayed lump sum following either the fifth or tenth anniversary of the completion of his or her service on the Board of Directors;
for cash deferrals, an immediate lump sum upon the completion of his or her service on the Board of Directors; or
pre-selected amounts to be distributed on pre-selected dates while the director remains a member of the Board of Directors.
The Director Deferral Plan does not provide for matching contributions by the Company, but our Board of Directors may determine, in its discretion, to supplement the accounts of participating directors with additional amounts.
Other Compensation
We reimburse directors for any out-of-pocket expenses incurred in connection with service as a director. We also provide health care coverage to directors but only if the director is not eligible for coverage under another group health care benefit program. Health care coverage is provided generally on the same terms and conditions as current employees. Upon retirement from the Board of Directors, directors may continue to obtain health care coverage under benefit continuation coverage, and after the lapse of such coverage, under the Company’s post-employment medical plan for up to a total of 96 months if they are otherwise eligible.
The Company maintains a program through which it will match up to $15,000 of charitable donations made by each director for each calendar year. The directors do not receive any financial benefit from this program because the charitable income tax deductions accrue solely to the Company. Donations under the program may not be made to family trusts, partnerships or similar organizations.



Effective November 8, 2019

Exhibit 10.44

AMENDED AND RESTATED
EMPLOYMENT AGREEMENT

This Agreement is between Dirk McMahon (“Executive”) and United HealthCare Services, Inc. (“UnitedHealth Group”), and is effective as of the last date executed below (the “Effective Date”). This Agreement’s purposes are to set forth certain terms of Executive’s employment by UnitedHealth Group or one of its affiliates and to protect UnitedHealth Group’s knowledge, expertise, customer relationships, and confidential information. Unless the context otherwise requires, “UnitedHealth Group” includes all its affiliated entities.    This Agreement amends and restates the Employment Agreement between Executive and UnitedHealth Group previously effective as of May 2, 2005, as amended on December 22, 2008, and is effective as of the Effective Date.
1.    Employment and Duties.
A.
Employment.    UnitedHealth Group hereby employs Executive, and Executive accepts employment, under this Agreement’s terms.
B.
Title and Duties. Executive will be employed as the Executive Vice President, Enterprise Operations and Technology, UnitedHealth Group. Executive will perform such duties, and exercise such supervision and control, as are commonly associated with Executive’s position, as well as perform such other duties as are reasonably assigned to Executive. Executive will devote substantially all of Executive’s business time and energy to Executive’s duties. Executive will maintain operations in Executive’s area of responsibility, and make every reasonable effort to ensure that the employees within that area of responsibility act, in compliance with applicable law and UnitedHealth Group’s Code of Conduct, as amended from time to time. Executive is subject to all of UnitedHealth Group’s employment policies and procedures (except as specifically superseded by this Agreement).
2.     Compensation and Benefits.
A.
Base Salary. Effective December 1, 2014, Executive’s base salary will be $800,000, less applicable withholdings and deductions, payable according to UnitedHealth Group’s regular payroll schedule. Periodic adjustments to Executive’s base salary may be made in UnitedHealth Group’s sole discretion.
B.
Incentive Compensation. Executive will be eligible to participate in UnitedHealth Group’s incentive compensation plans in UnitedHealth Group’s discretion and in accordance with the plans’ terms and conditions. Executive’s target bonus for the annual cash incentive will be 125% of annual base salary, subject to periodic adjustments in UnitedHealth Group’s discretion.



C.
Employee Benefits. Executive will be eligible to participate in UnitedHealth Group’s employee welfare, retirement, and other benefit plans on the same basis as other similarly situated executives, in accordance with the terms of the plans. Executive will be eligible for Paid Time Off in accordance with UnitedHealth Group’s policies. UnitedHealth Group reserves the right to amend or discontinue any plan or policy at any time in its sole discretion. In addition to the Company’s generally available benefits, UnitedHealth Group shall provide Executive, at UnitedHealth Group’s expense during the term of Executive’s employment, a $2 million face value term life insurance policy and a long term disability policy which covers 60% of base salary in the event of a qualifying long term disability, subject to the policy terms.
3.     Termination of Employment.
A.
By Mutual Agreement. The parties may terminate Executive’s employment at any time by mutual agreement.

B.
By UnitedHealth Group without Cause. UnitedHealth Group may terminate Executive’s employment without Cause upon 90 days’ prior written notice.

C.
By UnitedHealth Group with Cause. UnitedHealth Group may terminate Executive’s employment at any time for Cause. “Cause” means Executive’s (a) material failure to follow UnitedHealth Group’s reasonable direction or to perform any duties reasonably required on material matters, (b) material violation of, or failure to act upon or report known or suspected violations of, UnitedHealth Group’s Code of Conduct, as amended from time to time, (c) conviction of any felony, (d) commission of any criminal, fraudulent, or dishonest act in connection with Executive’s employment, (e) material breach of this Agreement, or (f) conduct that is materially detrimental to UnitedHealth Group’s interests. UnitedHealth Group will, within 120 days of discovery of the conduct, give Executive written notice specifying the conduct constituting Cause in reasonable detail and Executive will have 60 days to remedy such conduct, if such conduct is reasonably capable of being remedied. In any instance where the Company may have grounds for Cause, failure by the Company to provide written notice of the grounds for Cause within 120 days of discovery shall be a waiver of its right to assert the subject conduct as a basis for termination for Cause.

D.
By Executive without Good Reason. Executive may terminate Executive’s employment at any time for any reason, including due to Executive’s retirement.

E.
By Executive for Good Reason. Executive may terminate Executive’s employment for Good Reason, as defined below. Executive must give

2


UnitedHealth Group written notice specifying in reasonable detail the circumstances constituting Good Reason, within 120 days of becoming aware of such circumstances, or such circumstances will not constitute Good Reason. If the circumstances constituting Good Reason are reasonably capable of being remedied, UnitedHealth Group will have 60 days to remedy such circumstances. “Good Reason” will exist if UnitedHealth Group takes any of the following actions, without Executive’s consent: (a) reduces Executive’s base salary or target bonus percentage other than in connection with a general reduction affecting a group of employees; (b) moves Executive’s primary work location more than 50 miles; (c) makes changes that substantially diminish Executive’s duties or responsibilities; or (d) changes the Executive’s reporting relationship.
    
F.
Due to Executive’s Death or Disability. Executive’s employment will terminate automatically if Executive dies, effective as of the date of Executive’s death. UnitedHealth Group may terminate Executive’s employment due to Executive’s disability that renders Executive incapable of performing the essential functions of Executive’s job, with or without reasonable accommodation. Executive will not be entitled to Severance Benefits under Section 4 in the event of termination due to Executive’s death or disability.
4.
Severance Benefits.
A.    Circumstances under Which Severance Benefits Payable. Executive will be entitled to Severance Benefits only if Executive’s employment is terminated by UnitedHealth Group without Cause or if Executive terminates employment for Good Reason. Whether Executive has had a termination of employment will be determined in a manner consistent with the definition of “Separation from Service” under Section 409A of the Internal Revenue Code of 1986 and its accompanying regulations (“Section 409A”) and will be referred to herein as a “Termination.” For purposes of this Agreement, Executive will be considered to have experienced a Termination as of the date that the facts and circumstances indicate that it is reasonably anticipated that Executive will provide no further services after such date or that the level of bona fide services that Executive is expected to perform permanently decreases to no more than 20% of the average level of bona fide services that Executive performed over the immediately preceding 36-month period In consideration of the Severance Benefits in this Agreement, Executive waives any payments or benefits to which Executive otherwise might be or become entitled under any UnitedHealth Group severance plan or program.
B.
Severance Benefits. Subject to Section 4.C, Executive shall be entitled to the following Severance Benefits if Executive experiences a Termination under the circumstances described in Section 4.A above:
(i) Two times Executive’s annualized base salary as of Executive’s Termination.

3



(ii) Any bonus or incentive compensation paid or payable to Executive for the two most recent calendar years (excluding equity-related awards, payments under any long-term or similar benefit plan, or any other special or one-time bonus or incentive compensation payments); provided, however, that if termination occurs within two years following the Effective Date, the amount payable under this paragraph will be two times Executive’s target incentive.
(iii) $12,000 lump sum payment, minus applicable deductions, to offset costs of COBRA, which amount will be paid within 60 days following Termination.
(iv) Outplacement services consistent with those provided to similarly situated executives provided by an outplacement firm selected by UnitedHealth Group.
The Severance Benefits in Sections 4.B.(i)-(ii) will be paid out, minus applicable deductions, including deductions for tax withholding, in equal bi-weekly payments on the regular payroll cycle over the 24-month period following Executive’s Termination. Commencement of payments shall begin on the first payroll date that is at least 60 days after the date of Executive’s Termination (the “Starting Date”), provided that Executive has satisfied the requirement in Section 4.C. The first payment on the Starting Date shall include those payments that would have been previously paid if the payments of the severance compensation had begun on the first payroll date following the date of Executive’s Termination. Executive’s entitlement to the payments of the severance compensation described in Sections 4.B(i)-(ii) shall be treated as the entitlement to a series of separate payments for purposes of Section 409A.
If Executive is a “Specified Employee” (within the meaning of Section 409A and determined pursuant to procedures adopted by UnitedHealth Group) at the time of Executive’s Termination and any amount that would be paid to Executive during the six-month period following Termination constitutes “Deferred Compensation” (within the meaning of Section 409A), such amount shall not be paid to Executive until the later of (i) six months after the date of Executive’s Termination, and (ii) the payment date or commencement date specified in this Agreement for such payment(s). On the first regular payroll date following the expiration of such six-month period (or if Executive dies during the six-month period, the first payroll date following the death), all payments that were delayed pursuant to the preceding sentence shall be paid to Executive in a single lump sum and thereafter all payments shall be made as if there had been no such delay. All Severance Benefits described in Section 4.B shall be paid by, and no further severance compensation shall be paid or payable after, December 31 of the second calendar year following the year in which Executive’s Termination occurs.
C.
Separation Agreement and Release Required. In order to receive any Severance Benefits under this Agreement, Executive must timely sign a separation agreement

4


and release of claims in a form determined by UnitedHealth Group in its discretion. UnitedHealth Group shall provide to Executive a form of separation agreement and release of claims no later than three (3) days following Executive’s date of Termination. If Executive does not timely execute and deliver to UnitedHealth Group such separation agreement and release, or if Executive does so, but then revokes it if permitted by and within the time required by applicable law, UnitedHealth Group will have no obligation to pay severance compensation to Executive.
5.
Property Rights, Confidentiality, Non-Disparagement, and Restrictive Covenants.
A.UnitedHealth Group’s Property.
i.
Assignment of Property Rights. Executive must promptly disclose in writing to UnitedHealth Group all inventions, discoveries, processes, procedures, methods and works of authorship, whether or not patentable or copyrightable, that Executive alone or jointly conceives, makes, discovers, writes or creates, during working hours or on Executive’s own time, during this Agreement’s term (the “Works”). Executive hereby assigns to UnitedHealth Group all Executive’s rights, including copyrights and patent rights, to all Works. Executive must assist UnitedHealth Group as it reasonably requires to perfect, protect, and use its rights to the Works. This provision does not apply to any Work for which no UnitedHealth Group equipment, supplies, facility or trade secret information was used and: (1) which does not relate directly to UnitedHealth Group’s business or actual or demonstrably anticipated research or development, or (2) which does not result from any work performed for UnitedHealth Group.
ii.
No Removal of Property. Executive may not remove from UnitedHealth Group’s premises any UnitedHealth Group records, documents, data or other property, in either original or duplicate form, except as necessary in the ordinary course of UnitedHealth Group’s business.
iii.
Return of Property. Executive must immediately deliver to UnitedHealth Group, upon termination of employment, or at any other time at UnitedHealth Group’s request, all UnitedHealth Group property, including records, documents, data, and equipment, and all copies of any such property, including any records or data Executive prepared during employment.
B.
Confidential Information. Executive will be given access to and provided with sensitive, confidential, proprietary and trade secret information (“Confidential Information”) in the course of Executive’s employment. Examples of Confidential Information include: inventions; new product or marketing plans; business strategies and plans; merger and acquisition targets; financial and pricing

5


information; computer programs, source codes, models and databases; analytical models; customer lists and information; and supplier and vendor lists and other information which is not generally available to the public. Executive agrees not to disclose or use Confidential Information, either during or after Executive’s employment with UnitedHealth Group, except as necessary to perform Executive’s UnitedHealth Group duties or as UnitedHealth Group may consent in writing.
C.
Non-Disparagement. Executive agrees not to criticize, make any negative comments about or otherwise disparage UnitedHealth Group or those associated with it, whether orally, in writing or otherwise, directly or by implication, to any person or entity, including UnitedHealth Group customers or agents.
D.
Restrictive Covenants. Executive agrees to the restrictive covenants in this Section in consideration of Executive’s employment and UnitedHealth Group’s promises in this Agreement, including providing Executive access to Confidential Information. The restrictive covenants in this Section apply during Executive’s employment and for 24 months following termination of employment for any reason. Executive agrees that he/she will not, without UnitedHealth Group's prior written consent, directly or indirectly, for Executive or for any other person or entity, as agent, employee, officer, director, consultant, owner, principal, partner or shareholder, or in any other individual or representative capacity, engage in any of the following activities:    
i.
Non-Solicitation. Executive will not:
(a)
Solicit or conduct business with any business competitive with UnitedHealth Group from any person or entity: (1) who was a UnitedHealth Group provider or customer within the 12 months before Executive’s employment termination and with whom Executive had contact regarding UnitedHealth Group’s activity, products or services, or for whom Executive provided services or supervised employees who provided those services, or about whom Executive learned Confidential Information during employment related to UnitedHealth Group’s provision of products and services to such person or entity, or (2) was a prospective provider or customer UnitedHealth Group solicited within the 12 months before Executive’s employment termination and with whom Executive had contact for the purposes of soliciting the person or entity to become a provider or customer of UnitedHealth Group, or supervised employees who had those contacts, or about whom Executive learned Confidential Information during employment related to UnitedHealth Group’s provision of products and services to such person or entity;

6



(b)
Raid, hire, employ, recruit or solicit any UnitedHealth Group employee or consultant who possesses Confidential Information of UnitedHealth Group to leave UnitedHealth Group to join a competitor;
(c)
Induce or influence any UnitedHealth Group employee, consultant, or provider who possesses Confidential Information of UnitedHealth Group to terminate his, her or its employment or other relationship with UnitedHealth Group; or
(d)
Assist anyone in any of the activities listed above.
ii.
Non-Competition. Executive will not:
(a)
Engage in or participate in any activity that competes, directly or indirectly, with any UnitedHealth Group activity, product or service that Executive engaged in, participated in, or had Confidential Information about during Executive’s last 36 months of employment with UnitedHealth Group; or
(b)
Assist anyone in any of the activities listed above.
iii.
Because UnitedHealth Group’s business competes on a nationwide basis, the Executive’s obligations under this “Restrictive Covenants” section shall apply on a nationwide basis anywhere in the United States.
iv.
To the extent Executive and UnitedHealth Group agree at any time to enter into separate agreements containing restrictive covenants with different or inconsistent terms than those contained herein, Executive and UnitedHealth Group acknowledge and agree that such different or inconsistent terms shall not in any way affect or have relevance to the Restrictive Covenants contained herein.
Executive agrees that the provisions of this Section 5 are reasonable and necessary to protect the legitimate interests of UnitedHealth Group.
E.
Cooperation and Indemnification. Executive agrees to cooperate fully (i) with UnitedHealth Group in the investigation, prosecution or defense of any potential claims or concerns regarding UnitedHealth Group’s business about which Executive has relevant knowledge, including by providing truthful information and testimony as reasonably requested by UnitedHealth Group, and (ii) with all government authorities on matters pertaining to any investigation, litigation or administrative proceeding concerning UnitedHealth Group. UnitedHealth Group will reimburse Executive for any reasonable travel and out-of-pocket expenses incurred by Executive in providing such cooperation. UnitedHealth Group will

7


indemnify Executive, in accordance with the Minnesota Business Corporation Act, for all claims and other covered matters arising in connection with Executive’s employment.
F.
Injunctive Relief. Executive agrees that (a) legal remedies (money damages) for any breach of Section 5 will be inadequate, (b) UnitedHealth Group will suffer immediate and irreparable harm from any such breach, and (c) UnitedHealth Group will be entitled to injunctive relief from a court in addition to any legal remedies UnitedHealth Group may seek in arbitration. If an arbitrator or court determines that Executive has breached any provision of Section 5, Executive agrees to pay to UnitedHealth Group its reasonable costs and attorney’s fees incurred in enforcing that provision.
6.
Miscellaneous.
A.
Tax Withholding. All compensation payable under this Agreement will be subject to applicable tax withholding and other required or authorized deductions.
B.
Assignment. Executive may not assign this Agreement. UnitedHealth Group may assign this Agreement. Any successor to UnitedHealth Group will be deemed to be UnitedHealth Group under this Agreement.
C.
Entire Agreement; Amendment. This Agreement contains the parties’ entire agreement regarding its subject matter and may only be amended in a writing signed by the parties. This Agreement supersedes any and all prior oral or written employment agreements (including letters and memoranda) between Executive and UnitedHealth Group or its predecessors. This Agreement does not supersede the terms of any stock option, restricted stock, or stock appreciation rights plan or award.
D.
Choice of Law. Minnesota law governs this Agreement.
E.
Waivers. No party’s failure to exercise, or delay in exercising, any right or remedy under this Agreement will be a waiver of such right or remedy, nor will any single or partial exercise of any right or remedy preclude any other or further exercise of such right or remedy.
F.
Narrowed Enforcement and Severability. If a court or arbitrator decides that any provision of this Agreement is invalid or overbroad, the parties agree that the court or arbitrator should narrow such provision so that it is enforceable or, if narrowing is not possible or permissible, such provision should be considered severed and the other provisions of this Agreement should be unaffected.

8



G.
Dispute Resolution and Remedies. Except for injunctive relief under Section 5.F, any dispute between the parties relating to this Agreement or to Executive’s employment will be resolved by binding arbitration under UnitedHealth Group’s Employment Arbitration Policy, as it may be amended from time to time. The arbitrator(s) may not vary this Agreement’s terms and must apply applicable law.
H.
Payment of Deferred Compensation - Section 409A. To the extent applicable, it is intended that the compensation arrangements under this Agreement be in full compliance with Section 409A. This Agreement shall be construed in a manner to give effect to such intention. In no event whatsoever shall UnitedHealth Group be liable for any tax, interest or penalties that may be imposed on Executive under Section 409A. UnitedHealth Group shall have no obligation to indemnify or otherwise hold Executive harmless from any such taxes, interest or penalties, or from liability for any damages related thereto.
I.
Electronic Transmission/Counterparts. The executed version of this Agreement may be delivered by facsimile or email, and upon receipt, such transmission shall be deemed delivery of an original. This Agreement may be executed in two or more counterparts, each of which shall be deemed to be an original, and all of which together will constitute one document.

United HealthCare Services, Inc.
 
 
Executive
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
By:
 
 
/s/ D. Ellen Wilson
 
 
 
/s/ Dirk McMahon
 
Its
 
 
EVP Human Capital
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Date
 
3/16/15
 
Date
 
3/13/15
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 


 


9

Exhibit 10.45

AMENDMENT TO EMPLOYMENT AGREEMENT

This AMENDMENT AGREEMENT (the “Amendment”) modifies certain terms and conditions of the employment agreement effective March 16, 2015 between Dirk McMahon and United HealthCare Services, Inc. (the “Employment Agreement”). Accordingly, Executive’s Employment Agreement is amended as follows, effective as of the last date executed below:

Section 3.E. is hereby deleted and replaced with the following:
By Executive for Good Reason. Executive may terminate Executive’s employment for Good Reason, as defined below. Executive must give UnitedHealth Group written notice specifying in reasonable detail the circumstances constituting Good Reason: i) within 120 days of becoming aware of such circumstances described in (a), (b), or (c) below; or ii) at any time on or before one year following a change described in (d) below, or such circumstances will not constitute Good Reason. If the circumstances constituting Good Reason are reasonably capable of being remedied, UnitedHealth Group will have 60 days to remedy such circumstances. “Good Reason” will exist if UnitedHealth Group takes any of the following actions, without Executive’s consent: (a) reduces Executive’s base salary or target bonus percentage other than in connection with a general reduction affecting a group of employees; (b) moves Executive’s primary work location more than 50 miles; (c) makes changes that substantially diminish Executive’s duties or responsibilities; or (d) Executive no longer reports to Larry Renfro, Chief Executive Officer, Optum.”
The third sentence of Section 5.D. is hereby amended to read:
“Executive agrees that he/she will not, without UnitedHealth Group's prior written consent, which consent will not be unreasonably withheld, directly or indirectly, for Executive or for any other person or entity, as agent, employee, officer, director, consultant, owner, principal, partner or shareholder, or in any other individual or representative capacity, engage in any of the following activities.”

Except as expressly set forth in this Amendment, the Employment Agreement remains in full force and effect according to its terms.


UNITEDHEALTH GROUP
 
DIRK MCMAHON
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
By:
/s/ D. Ellen Wilson
 
By:
/s/ Dirk McMahon
 
 
 
 
 
 
 
 
 
 
 
Date:
5/31/17




Exhibit 10.46

AMENDMENT TO EMPLOYMENT AGREEMENT

This AMENDMENT TO EMPLOYMENT AGREEMENT (the “Amendment”) modifies certain terms and conditions of the Employment Agreement effective March 16, 2015 between Dirk McMahon and United HealthCare Services, Inc., as amended effective May 31, 2017, (the “Employment Agreement”). Accordingly, Executive’s Employment Agreement is amended, effective as of the last date executed below, as follows:

Section 3.E is hereby deleted and replaced with the following:

By Executive for Good Reason.  Executive may terminate Executive’s employment for Good Reason, as defined below.  Executive must give UnitedHealth Group written notice specifying in reasonable detail the circumstances constituting Good Reason within 120 days of becoming aware of such circumstances, or such circumstances will not constitute Good Reason.  If the circumstances constituting Good Reason are reasonably capable of being remedied, UnitedHealth Group will have 60 days to remedy such circumstances.  “Good Reason” will exist if UnitedHealth Group takes any of the following actions, without Executive’s consent:  (a) reduces Executive’s base salary or target bonus percentage other than in connection with a general reduction affecting a group of employees; (b) moves Executive’s primary work location more than 50 miles; (c) makes changes that substantially diminish Executive’s duties or responsibilities; or (d) changes Executive’s reporting relationship.  In addition, Executive must, on or before December 31, 2019, give UnitedHealth Group written notice of his intent to terminate his employment for Good Reason as a result of the July 1, 2018 change in Executive’s reporting relationship, which change in reporting relationship constituted Good Reason as that term was defined as of July 1, 2018.  If Executive does not give UnitedHealth Group such written notice on or before December 31, 2019, Executive’s July 1, 2018 change in reporting relationship will no longer constitute Good Reason.”

Except as expressly set forth in this Amendment, the Employment Agreement remains in full force and effect according to its terms.

United HealthCare Services, Inc.
 
Executive
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
By:
/s/ D. Ellen Wilson
 
By:
 
/s/ Dirk McMahon
 
Its:
Chief Human Resources Officer
 
 
 
 
 
 
 
 
 
 
 
 
 
Date:
3/12/19
 
Date:
3/11/19
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 





Exhibit 21.1
Subsidiaries of the Company

Listed below are subsidiaries of UnitedHealth Group Incorporated as of December 31, 2019. Those subsidiaries not listed would not, in the aggregate, constitute a “significant subsidiary” of UnitedHealth Group Incorporated, as that term is defined in Rule 1-02(w) of Regulation S-X.
Name of Entity
State of Jurisdiction or Domicile
Doing Business As
1070715 B.C. Unlimited Liability Company
British Columbia
 
1st Avenue Pharmacy, Inc.
Washington
1st Avenue Pharmacy
Genoa Healthcare
310 Canyon Medical, LLC
California
 
4C Medical Group, PLC
Arizona
 
4C MSO LLC
Delaware
 
5995 Minnetonka, LLC
Delaware
 
ABCO International Holdings, LLC
Delaware
 
Access Administrators, Inc.
Texas
 
Access HealthSource Administrators, Inc.
Texas
 
Access HealthSource, Inc.
Texas
 
ACN Group IPA of New York, Inc.
New York
 
ACN Group of California, Inc.
California
 
Administradora Clínica La Colina S.A.S.
Colombia
 
Administradora Country S.A.
Colombia
 
Administradora Médica Centromed S.A.
Chile
 
Advanced Pharma, Inc.
Texas
Avella of Houston
Advanced Surgery Center of Clifton, LLC
New Jersey
 
Advanced Surgical Hospital, LLC
Pennsylvania
 
Advantage Care Network, Inc.
Delaware
 
Advocate Condell Ambulatory Surgery Center, LLC
Illinois
 
Advocate Sherman Ambulatory Surgery Center, LLC
Illinois
 
Advocate Southwest Ambulatory Surgery Center, LLC
Illinois
 
Advocate-SCA Partners, LLC
Delaware
 
AHN Accontable Care Organization, LLC
Indiana
 
AHN Central Services, LLC
Indiana
 
AHN Target Holdings, LLC
Delaware
 
Aliansalud Entidad Promotora de Salud S.A.
Colombia
 
All Savers Insurance Company
Indiana
 
All Savers Life Insurance Company of California
California
 
Alliance Surgical Center, LLC
Florida
 
Aloha Surgical Center, LLC
Tennessee
 
Ambient Healthcare, Inc.
Florida
 
Ambient Holdings, Inc.
Delaware
 
American Health Network of Indiana Care Organization, LLC
Indiana
 
American Health Network of Indiana II, LLC
Indiana
Healthcare Network
American Health Network of Indiana, LLC
Indiana
EXPRESS CARE
American Health Network of Ohio Care Organization, LLC
Ohio
 
American Health Network of Ohio II, LLC
Ohio
 





American Health Network of Ohio, LLC
Ohio
 
AmeriChoice Corporation
Delaware
 
AmeriChoice of New Jersey, Inc.
New Jersey
UnitedHealthcare Community Plan
Amico Saúde Ltda.
Brazil
 
Amil Assistência Médica Internacional S.A.
Brazil
 
AMIL International
Luxembourg
 
Análisis Clínicos ML S.A.C.
Peru
 
Antelope Valley Surgery Center, L.P.
California
 
Apothecary Holdings, Inc.
Delaware
 
Apothecary Shop of Phoenix, Inc.
Arizona
 
AppleCare Medical Management, LLC
Delaware
 
APS – Assistência Personalizada à Saúde Ltda.
Brazil
 
Aquitania Chilean Holding SpA
Chile
 
Arise Physician Group
Texas
 
Arizona Physicians IPA, Inc.
Arizona
UnitedHealthcare Community Plan
ASC Holdings of New Jersey, LLC
New Jersey
 
ASC Network, LLC
Delaware
 
ASI Global, LLC
Texas
 
AssuranceRx, LLC
Alabama
 
Athens ASC Holdings, LLC
Georgia
 
Audax Health Solutions, LLC
Delaware
 
Austin Center for Outpatient Surgery, L.P.
Georgia
 
Avella of Austin, Inc.
Arizona
 
Avella of Columbus, Inc.
Arizona
 
Avella of Deer Valley, Inc.
Arizona
Avella of Deer Valley, Inc. #038
Avella Specialty Pharmacy
Avella of Denver, Inc.
Arizona
 
Avella of Gilbert, Inc.
Arizona
 
Avella of Las Vegas II, Inc.
Arizona
 
Avella of Orlando, Inc.
Arizona
 
Avella of Phoenix III, Inc.
Arizona
 
Avella of Sacramento, Inc.
California
 
Avella of Scottsdale, Inc.
Arizona
 
Avella of St. Louis, Inc.
Arizona
 
Avella of Tampa, LLC
Florida
 
Avella of Tucson II, Inc.
Arizona
 
Avella of Tucson, Inc.
Arizona
 
Avella Patient Access Program, Inc.
Arizona
 
Aveta Inc.
Delaware
 
AxelaCare Intermediate Holdings, LLC
Delaware
 
AxelaCare, LLC
Delaware
 
B.R.A.S.S. Partnership in Commendam
Louisiana
 
Banmédica Colombia SpA
Colombia
 
Banmédica Internacional SpA
Chile
 
Banmédica S.A.
Chile
 
Beach Surgical Holdings III, LLC
California
 
Behavioral Healthcare Options, Inc.
Nevada
 





Belleville Surgical Center, Ltd., an Illinois Limited Partnership
Illinois
 
Benefit Administration for the Self Employed, L.L.C.
Iowa
 
Benefitter Insurance Solutions, Inc.
Delaware
 
Birmingham Outpatient Surgical Center, LLC
Delaware
 
Blackstone Valley Surgicare GP, LLC
Delaware
 
Blue Ridge GP, LLC
North Carolina
 
Bordeaux (Barbados) Holdings I, SRL
Barbados
 
Bordeaux (Barbados) Holdings II, SRL
Barbados
 
Bordeaux (Barbados) Holdings III, SRL
Barbados
 
Bordeaux Holding SpA
Chile
 
Bordeaux International Holdings, Inc.
Delaware
 
Bordeaux UK Holdings I Limited
United Kingdom
 
Bordeaux UK Holdings II Limited
United Kingdom
 
Bordeaux UK Holdings III Limited
United Kingdom
 
Bosque Medical Center Ltda.
Brazil
 
Brandon Ambulatory Surgery Center, LC
Florida
 
BriovaRx Infusion Services 102, LLC
Delaware
 
BriovaRx Infusion Services 200, Inc.
South Carolina
 
BriovaRx Infusion Services 204, Inc.
Florida
 
BriovaRx Infusion Services 209, Inc.
Georgia
AxelaCare
BriovaRx Infusion Services 305, LLC
Delaware
 
BriovaRx Infusion Services 402, LLC
California
 
BriovaRx Infusion Services, Inc.
Delaware
BriovaRx Infusion Services
BriovaRx of California, Inc.
California
BriovaRx MRP
BriovaRx of Los Angeles
BriovaRx of Florida, Inc.
Delaware
BriovaRx of Florida
BriovaRx of Georgia, LLC
Alabama
 
BriovaRx of Louisiana, L.L.C.
Louisiana
 
BriovaRx of Maine, Inc.
Maine
BriovaRx
BriovaRx of Massachusetts, LLC
Massachusetts
 
BriovaRx of New York, Inc.
New York
BriovaRx of New York
BriovaRx of Texas, Inc.
Texas
BriovaRx of Texas
BriovaRx Specialty, LLC
Delaware
BriovaRx Specialty
Cabin Enterprises, LLC
Delaware
 
Cabin Holdings, LLC
Delaware
 
California Medical Group Insurance Company, Risk Retention Group
Arizona
 
California MedTrans Network IPA LLC
California
 
California MedTrans Network MSO LLC
California
 
Camp Hill-SCA Centers, LLC
Delaware
 
Capital City Medical Group, L.L.C.
Louisiana
Peoples Health Clinical
Cardio Management, Inc.
Delaware
 
Care Improvement Plus Group Management, LLC
Maryland
 
Care Improvement Plus of Texas Insurance Company
Texas
Care Improvement Plan
Care Improvement Plus South Central Insurance Company
Arkansas
 
Care Improvement Plus Wisconsin Insurance Company
Wisconsin
 





Casa de Saúde Santa Therezinha Ltda.
Brazil
 
Castle Rock SurgiCenter, LLC
Colorado
 
Catalyst360, LLC
Delaware
CATALYST360 INSURANCE SERVICES, LLC
Catamaran Finance (Ireland) Unlimited Company
Dublin
 
Catamaran S.á.r.l.
Grand Duchy of Luxembourg
 
CDC Holdings Colombia S.A.S.
Colombia
 
Cedar Park Surgery Center, LLC
Texas
 
Cemed Care – Empresa de Atendimento Clínico Geral Ltda.
Brazil
 
Central de Compras SpA
Chile
 
Central Indiana Care Organization, LLC
Indiana
 
Central Ohio Care Organization, LLC
Ohio
 
CentrifyHealth, LLC
Delaware
 
CentriHealth Corporation
Ontario
 
CentriHealth UK Limited
United Kingdom
 
Centro de Entrenamiento en Reanimación y Prevención Limitada (CERP)
Chile
 
Centro de Servicios Compartidos Banmédica S.A.
Chile
 
Centro Médico Hospitalar Pitangueiras Ltda.
Brazil
 
Centro Médico Odontológico Americano S.A.C.
Peru
 
Centromed Quilpué S.A.
Chile
 
Centros Médicos y Dentales Multimed Ltda.
Chile
 
Centurion Casualty Company
Iowa
 
Channel Islands Surgicenter Properties, LLC
Delaware
 
Channel Islands Surgicenter, L.P.
California
 
Charleston Surgery Properties, LLC
Delaware
 
Charlotte-SC, LLC
Delaware
 
Childrens Surgery Center, LLC
Florida
 
ChinaGate (Hong Kong) Limited
Hong Kong
OptumInsight
Citrus Regional Surgery Center, L.P.
Tennessee
 
Clínica Alameda S.A.
Chile
 
Clínica Bío Bío S.A.
Chile
 
Clínica Ciudad del Mar S.A.
Chile
 
Clínica Dávila y Servicios Médicos S.A.
Chile
 
Clínica del Country S.A.
Colombia
 
Clínica Médico Cirúrgica de Santa Tecla, S.A.
Portugal
 
Clínica San Borja (La Esperanza del Perú S.A.)
Peru
 
Clínica San Felipe S.A.
Peru
 
Clínica Sánchez Ferrer S.A.
Peru
 
Clínica Santa María S.A.
Chile
 
Clínica Vespucio S.A.
Chile
 
Clinical Partners of Colorado Springs, LLC
Colorado
Clinical Partners of Colorado Springs, LLC
CLISA – Clínica de Santo António, S.A.
Portugal
 
CMO – Centro Médico de Oftalmologia S/S Ltda.
Brazil
 





CMS – Central de Manipulação e Serviços Farmacêuticos S.A.
Brazil
 
CNIC Health Solutions, Inc.
Colorado
Rocky Mountain Health Administrators, Inc.
Specialty Claims Solutions
Coachella Valley Physicians of PrimeCare, Inc.
California
 
Coalition for Advanced Pharmacy Services, Inc.
Delaware
 
Coastal Physicians Management, Inc.
California
Coastal Physicians Management, Inc.
COI – Clínicas Oncológicas Integradas S.A.
Brazil
 
Collaborative Care Holdings, LLC
Delaware
 
Collaborative Care Services, Inc.
Delaware
 
Collaborative Realty, LLC
New York
 
Colmedica Medicina Prepagada
Colombia
 
Colonial Outpatient Surgery Center, LLC
Florida
 
Colorado Innovative Physician Solutions, Inc.
Colorado
Colorado Innovative Physician Solutions, Inc.
Colorado Springs Surgery Center, Ltd.
Colorado
 
Comfort Care Transportation, LLC
Texas
 
Connecticut Surgery Center, Limited Partnership
Connecticut
 
Connecticut Surgery Properties, LLC
Delaware
 
Connecticut Surgical Center, LLC
Delaware
 
Constructora e Inmobiliaria Magapoq S.A.
Chile
 
Consumer Wellness Solutions, Inc.
Delaware
 
Country Scan Ltda.
Colombia
 
Cypress Care, Inc.
Delaware
Optum Workers Compensation Services of Georgia
Danbury Surgical Center, L.P.
Georgia
 
DaVita Magan Management, Inc.
California
 
Day-Op Surgery Consulting Company, LLC
Delaware
 
DBP Services of New York IPA, Inc.
New York
 
Dental Benefit Providers of California, Inc.
California
OptumHealth Dental of California
Dental Benefit Providers of Illinois, Inc.
Illinois
 
Dental Benefit Providers, Inc.
Delaware
DBP Services
DBP Services Inc.
Derry Surgical Center, LLC
New Hampshire
 
Diagnóstico Ecotomográfico Centromed Ltda.
Chile
 
Diasnóstico por Imágenes Centromed Ltda.
Chile
 
Dilab Medicina Nuclear Ltda.
Brazil
 
Distance Learning Network, Inc.
Delaware
i3CME
OptumHealth Education
Doctor + S.A.C.
Peru
 
Dry Creek Surgery Center, LLC
Colorado
 
DTC Surgery Center, LLC
Colorado
 
Dublin Surgery Center, LLC
Ohio
 
Duncan Printing Services, LLC
South Carolina
 





DWIC of Tampa Bay, Inc.
Florida
Doctor's Walk-In Clinics
MedExpress
MedExpress Urgent Care - Cape Coral, SW Pine Island Rd
MedExpress Urgent Care - Carrollwood
MedExpress Urgent Care - Clearwater
MedExpress Urgent Care - Clewiston, W Sugarland Hwy
MedExpress Urgent Care - Deland, N Woodland Blvd
MedExpress Urgent Care - Fort Meyers, S Cleveland Ave
MedExpress Urgent Care - Golden Gate, Collier Blvd.
MedExpress Urgent Care - Hudson, State Road 52
MedExpress Urgent Care - Jacksonville, Atlantic Blvd.
MedExpress Urgent Care - Jacksonville, Merrill Rd
MedExpress Urgent Care - Lakeland, N Road 98
MedExpress Urgent Care - Largo
MedExpress Urgent Care - Lehigh Acres, Homestead Rd N
MedExpress Urgent Care - Lutz
MedExpress Urgent Care - New Tampa
MedExpress Urgent Care - North Port, Tuscola Blvd
MedExpress Urgent Care - Northside
MedExpress Urgent Care - Palm Beach Gardens
MedExpress Urgent Care - Port Charlotte, Tamiami Trl
MedExpress Urgent Care - Vero Beach, US Highway 1
MedExpress Urgent Care - West Tampa
MedExpress Urgent Care-Brandon
E Street Endoscopy, LLC
Florida
 
Ear Professionals International Corporation
Delaware
EPIC Hearing Healthcare
UnitedHealthcare Hearing
East Brunswick Surgery Center, LLC
New Jersey
 
eCode Solutions, LLC
Delaware
 
Electronic Network Systems, Inc.
Delaware
 
Elual Participações S.A.
Brazil
 
Empire Physician Management Company, LLC
California
 
Employers’ Health Choice PPO, Inc.
Arkansas
 
Empremédica S. A.
Peru
 
Endoscopy Center Affiliates, Inc.
Delaware
 
Enterprise Life Insurance Company
Texas
 
EP Campus I, LLC
Delaware
 
Equian Parent Corp.
Delaware
 
Equian, LLC
Indiana
Aftermath Claim Science
Casualty Recovery Solutions
Esho – Empresa de Serviços Hospitalares S.A.
Brazil
 
Etho – Empresa de Tecnologia Hospitalar Ltda.
Brazil
 
Evercare Collaborative Solutions, Inc.
Delaware
 
Everett MSO, Inc.
Washington
Everett MSO, Inc.
The Everett Clinic
Excellion Serviços Biomédicos Ltda.
Brazil
 





Excelsior Insurance Brokerage, Inc.
Delaware
 
Executive Health Resources, Inc.
Pennsylvania
 
Executive Surgery Center, LLC
Texas
 
Eye Clinic Oftalmologia Clínico Cirúrgica e Diagnóstico Ltda.
Brazil
 
Family Health Care Services
Nevada
Southwest Medical Associates Home Health
Family Home Hospice, Inc.
Nevada
Family Home Hospice and Palliative Care
OptumCare Palliative Care
Southwest Medical Associates Hospice and Palliative Care
Florida MedTrans Network LLC
Florida
 
Florida MedTrans Network MSO LLC
Florida
 
FMG Holdings, LLC
Delaware
 
For Health of Arizona, Inc.
Arizona
Geriatrix of Arizona
INSPIRIS of Arizona
For Health, Inc.
Delaware
 
Fortified Provider Network, Inc.
Arizona
 
Fortify Technologies Asia, LLC
Phillipines
 
Fortify Technologies, LLC
Minnesota
 
Foundation Financial Services, Inc.
Nevada
 
Franklin Surgical Center, LLC
New Jersey
 
Freedom Life Insurance Company of America
Texas
 
Freeway Surgicenter of Houston, LLC
Texas
 
Frontier Medex Tanzania Limited
Tanzania
 
FrontierMEDEX (RMS), Inc.
Delaware
 
FrontierMEDEX Government Services, LLC
Delaware
 
FrontierMEDEX Kenya Limited
Nairobi
 
FrontierMEDEX US, Inc.
Delaware
 
FrontierMEDEX, Inc.
Minnesota
UnitedHealthcare Global
Fundación Banmédica
Chile
 
Gadsden Surgery Center, LLC
Delaware
 
Gadsden Surgery Center, Ltd.
Alabama
 
Gainesville Surgery Center, L.P.
Tennessee
 
Gainesville Surgery Properties, LLC
Delaware
 
Genoa Healthcare LLC
Pennsylvania
 
Genoa Healthcare, Inc.
Delaware
 
Genoa of Arkansas, LLC
Arkansas
 
Genoa Technology (Canada) Inc.
Canada
 
Genoa Technology, Inc.
Delaware
 
Genoa Telepsychiatry, Inc.
Delaware
1DocWay, Inc.
Genoa, QoL Wholesale, LLC
Delaware
 
gethealthinsurance.com Agency Inc.
Indiana
 
Glenwood Surgical Center, L.P.
California
 
Glenwood-SC, Inc.
Tennessee
 
Golden Outlook, Inc.
California
Golden Outlook
Golden Outlook Insurance Services
Golden Rule Financial Corporation
Delaware
 
Golden Rule Insurance Company
Indiana
 





Golden Triangle Surgicenter, L.P.
California
 
GRANTS PASS SURGERY CENTER, LLC
Oregon
 
Grapevine Finance LLC
Delaware
 
Greater Hartford ASC, LLC
Connecticut
 
Grove Place Surgery Center, L.L.C.
Florida
 
H&W Indemnity (SPC), Ltd.
Grand Cayman
 
H.I. Investments Holding Company, LLC
Delaware
 
Harken Health Insurance Company
Wisconsin
 
Hayes-Strub, LLC
Ohio
 
HCentive Technology India Private Limited
India
 
hCentive, Inc.
Delaware
 
HCP ACO California, LLC
California
HCP ACO California, LLC
HealthCare Partners ACO
HCP ACO Nevada, LLC
Nevada
HCP ACO Nevada, LLC
Health Care-ONE Insurance Agency, Inc.
California
 
Health Inventures Employment Solutions, LLC
Delaware
 
Health Inventures, LLC
Delaware
 
Health Plan of Nevada, Inc.
Nevada
 
HealthAllies, Inc.
Delaware
OptumHealth Allies
UnitedHealth Allies
HealthCare Partners ASC-LB, LLC
California
DaVita Medical Group-Surgery Center, Long Beach
HealthCare Partners ASC-LB, LLC
HealthCare Partners Management Services California, LLC
California
HealthCare Partners Management Services California, LLC
HealthCare Partners Services, LLC
Healthcare Partners Plan of Nevada, Inc.
Nevada
DaVita Health Plan of Nevada, Inc.
HealthCare Partners RE, LLC
Delaware
DaVita Medical RE, LLC
HealthCare Partners RE, LLC
Healthcare Solutions, Inc.
Delaware
Optum Healthcare Solutions of Georgia
HealthFirst IPA, Inc.
Colorado
 
HealthMarkets Group, Inc.
Delaware
 
HealthMarkets Insurance Agency, Inc.
Delaware
 
HealthMarkets NewCo, Inc.
Delaware
 
HealthMarkets Services, Inc.
Delaware
 
HealthMarkets, Inc.
Delaware
 
HealthMarkets, LLC
Delaware
 
HealthScope Benefits, Inc.
Delaware
Health Benefits of Arkansas, Inc.
HealthSCOPE Holdings, Inc.
Delaware
 
Heartland Heart and Vascular, LLC
Delaware
 
Help S.A.
Chile
 
Help Service S.A.
Chile
 
Highlands Ranch Healthcare, LLC
Colorado
 
HMI NewCo, LLC
Delaware
 
Home Medical S.A.
Chile
 
Hospice Inspiris Holdings, Inc.
Tennessee
 
Hospitais Associados de Pernambuco Ltda.
Brazil
 
Hospital Alvorada de Taguatinga Ltda.
Brazil
 
Hospital Ana Costa S.A.
Brazil
 





Hospital de Clínicas de Jacarepaguá Ltda.
Brazil
 
Hospital Santa Helena S.A.
Brazil
 
Humedica, Inc.
Delaware
 
Hygeia Corporation
Delaware
 
Hygeia Corporation (Ontario)
Ontario
 
Illinois Independent Care Network
Delaware
 
Imed Star – Serviços de Desempenho Organizacional Ltda.
Brazil
 
Impel Consulting Experts, L.L.C.
Texas
 
Impel Management Services, L.L.C.
Texas
Impel Consulting Experts
Indian River Surgery Center, Ltd.
Florida
 
Indian River Surgery Properties, LLC
Florida
 
Indiana Care Organization, LLC
Indiana
 
Ingram & Associates, LLC
Tennessee
Ingram & Associates, LLC (Tennessee)
Ingram BPO Services, LLC
Inmobiliaria Apoquindo 3001 S.A.
Chile
 
Inmobiliaria Apoquindo 3600 Ltda.
Chile
 
Inmobiliaria Apoquindo S.A.
Chile
 
Inmobiliaria Clínica Santa María S.A.
Chile
 
Inmobiliaria e Inversiones Alameda S.A.
Chile
 
Inmobiliaria Viñamed Ltda.
Chile
 
INOV8 Surgical at Memorial City, LLC
Texas
 
inPharmative, Inc.
Nevada
 
INSPIRIS of New York Management, Inc.
New York
 
INSPIRIS of Texas Physician Group
Texas
Optum Clinic
Optum Clinic + Medical Spa
Optum Clinic + Urgent Care
Inspiris, Inc.
Delaware
 
Instituto do Radium de Cammpinas Ltda
Brazil
 
Inversiones Clínicas Santa María S.A.
Chile
 
Isapre Banmédica S.A.
Chile
 
Isapre Vida Tres S.A.
Chile
 
Johnston Surgicare, L.P.
Rhode Island
 
Joliet Surgery Center Limited Partnership
Illinois
 
Laboratorio ROE S.A.
Peru
 
Laboratorios Médicos Amed Quilpué S.A.
Chile
 
Lifeprint Accountable Care Organization, LLC
Delaware
Optum Accountable Care, Arizona
Lifeprint East, Inc.
Delaware
OptumCare Network of Connecticut
LifePrint Health, Inc.
Delaware
Optum Medical Network
OptumCare Medical Network
Optumcare Network of Indiana
LifeStyles Marketing Group, Inc.
Delaware
 
LifeWell, Ltd. Co.
Georgia
 
Logistics Health, Inc.
Wisconsin
 
Lotten-Eyes Oftalmologia Clinica e Cirurgica Ltda.
Brazil
 
Louisville S.C., Ltd.
Kentucky
 
Louisville-SC Properties, Inc.
Kentucky
 
Loyola Ambulatory Surgery Center at Oakbrook, Inc.
Illinois
 





Lusíadas - Parcerias Cascais, S.A.
Portugal
 
Lusíadas A.C.E.
Portugal
 
Lusíadas, S.A.
Portugal
 
Lusíadas, SGPS, S.A.
Portugal
 
MAMSI Life and Health Insurance Company
Maryland
 
Managed Physical Network, Inc.
New York
 
March Holdings, Inc.
California
 
March Vision Care, Inc.
California
 
Marin Surgery Holdings, Inc.
Delaware
 
Maryland Ambulatory Centers
Maryland
 
Maryland-SCA Centers, LLC
Delaware
 
Massachusetts Assurance Company, Ltd. PIC
Grand Cayman
 
Massachusetts Avenue Surgery Center, LLC
Maryland
 
MD Ops, Inc.
California
CHIEF
Community Health Information Exchange Foundation
MD-Individual Practice Association, Inc.
Maryland
 
ME AHS UC LLC
Delaware
 
Medalliance Net Ltda.
Brazil
 
MEDEX Insurance Services, Inc.
Maryland
MEDEX Insurance Agency
MedExpress Development, LLC
Florida
 
MedExpress Urgent Care Alabama, LLC
Alabama
 
MedExpress Urgent Care Maine, Inc.
Maine
 
MedExpress Urgent Care New Hampshire, Inc.
New Hampshire
 
MedExpress Urgent Care of Boynton Beach, LLC
Florida
MedExpress Urgent Care - Boca Raton
MedExpress Urgent Care - Coral Springs
MedExpress Urgent Care - Palm Beach Gardens
MedExpress Urgent Care - Royal Palm Beach
MedExpress Urgent Care, Inc. - Ohio
Ohio
 
Medica Health Plans of Florida, Inc.
Florida
 
Medica HealthCare Plans, Inc.
Florida
 
Medical Clinic of North Texas PLLC
Texas
USMD Physician Services
Medical Hilfe S.A.
Chile
 
Medical Support Los Angeles, Inc.
California
 
Medical Surgical Centers of America, Inc.
Delaware
 
Medical Transportation Services, LLC
Florida
MTS
Medication Management Systems, Inc.
Minnesota
 
MedSynergies, LLC
Delaware
 
Melbourne Surgery Center, LLC
Georgia
 
Memorial City Holdings, LLC
Delaware
 
Memorial City Partners, LLC
Delaware
 
Memphis-SC, LLC
Tennessee
 
Memphis-SP, LLC
Tennessee
 
Mesquite Liberty, LLC
Nevada
 
Metropolitan Medical Partners, LLC
Maryland
 
Metropolitan Medical Transportation IPA, LLC
New York
 
MGH/SCA, LLC
California
 





MHC Real Estate Holdings, LLC
California
 
MIAMI SURGERY CENTER, LLC
Delaware
 
Midwest Center for Day Surgery, LLC
Illinois
 
Mid-West National Life Insurance Company of Tennessee
Texas
 
Mile High SurgiCenter, LLC
Colorado
 
Mississippi Surgery Holdings, LLC
Delaware
 
Mississippi Surgical Center Limited Partnership
Mississippi
 
Modern Medical, Inc.
Ohio
MMI of Ohio, Inc.
Modern Medical of Ohio, Inc.
Optum Workers Compensation Medical Services
Optum Workers Compensation Services
Monarch Management Services, Inc.
Delaware
 
Montgomery Surgery Center Limited Partnership
Maryland
 
Mountain View Medical Group, LLC
Colorado
Mountain View Medical Group, LLC
Mountain View Medical Group, Part of DaVita Medical Group
Mountain View Medical Group, Part of Optum
MSLA Management LLC
Delaware
 
Mt. Pleasant Surgery Center, L.P.
Tennessee
 
Multiangio Ltda.
Brazil
 
Muskogee Surgical Investors, LLC
Oklahoma
 
Mustang Razorback Holdings, Inc.
Delaware
 
My Wellness Solutions, LLC
Delaware
 
NAMM Holdings, Inc.
Delaware
 
Nashville-SCA Surgery Centers, Inc.
Tennessee
 
National Foundation Life Insurance Company
Texas
 
National MedTrans, LLC
New York
 
National Pacific Dental, Inc.
Texas
 
National Surgery Centers, LLC
Delaware
 
Neighborhood Health Partnership, Inc.
Florida
 
Netwerkes, LLC
Tennessee
 
Nevada Pacific Dental
Nevada
 
New Orleans Regional Physician Hospital Organization, L.L.C.
Louisiana
Peoples Health
Peoples Health Network
New West Physicians, Inc.
Colorado
Elk Ridge Family Medicine
HEALTHFIRST PHYSICIANS
New West Physicians
Physician Alliance of the Rockies
Newton Holdings, LLC
Delaware
 
North American Medical Management California, Inc.
Tennessee
 
North Puget Sound Center for Sleep Disorders, LLC
Washington
North Puget Sound Center For Sleep Disorders, LLC
North Puget Sound Oncology Equipment Leasing Company, LLC
Washington
North Puget Sound Oncology Equipment Leasing Company, LLC
Northern Nevada Health Network, Inc.
Nevada
 
Northern Rockies Surgicenter, Inc.
Montana
 
Northwest Surgicare, LLC
Delaware
 
Northwest Surgicare, Ltd.
Illinois
 





NSC Fayetteville, LLC
Delaware
 
NSC Greensboro, LLC
Delaware
 
NSC Lancaster, LLC
Delaware
 
NSC Seattle, Inc.
Washington
 
NSC Upland, LLC
Delaware
 
OC Cardiology Practice Partners, LLC
Delaware
 
Omesa S.A.
Chile
 
OmniClaim, LLC
Delaware
 
Oncocare S.A.C.
Peru
 
OneNet PPO, LLC
Maryland
 
Optimum Choice, Inc.
Maryland
 
Optum Bank, Inc.
Utah
Exante Bank, Inc.
OptumHealth Bank, Inc.
Optum Biometrics, Inc.
Illinois
 
Optum Care Services Company
Tennessee
 
Optum Care, Inc.
Delaware
 
Optum Clinics Holdings, Inc.
Delaware
 
Optum Clinics Intermediate Holdings, Inc.
Delaware
 
Optum Digital Health Holdings, LLC
Delaware
 
Optum Finance (Ireland) Unlimited Company
Dublin
 
Optum Global Solutions (India) Private Limited
India
 
Optum Global Solutions (Philippines), Inc.
Phillipines
 
Optum Global Solutions International B.V.
Netherlands
 
Optum Government Solutions, Inc.
Delaware
 
Optum Growth Partners, LLC
Delaware
 
Optum Health & Technology (Hong Kong) Limited
Hong Kong
 
Optum Health & Technology (India) Private Limited
India
 
Optum Health & Technology (Singapore) Pte. Ltd.
Singapore
 
Optum Health & Technology (US), LLC
Missouri
 
Optum Health & Technology Holdings (US), Inc.
Missouri
 
Optum Health & Technology Serviços do Brasil Ltda.
Brazil
 
Optum Health and Technology FZ-LLC
Dubai
 
Optum Health Services (Canada) Ltd.
British Columbia
Interlock Employee and Family Assistance
Optum International
Optum Health Solutions (Australia) Pty Ltd
Australia
 
Optum Health Solutions (UK) Limited
United Kingdom
 
Optum Healthcare of Illinois, Inc.
Georgia
 
Optum Hospice Pharmacy Services, LLC
Delaware
HospiScript Services
Optum Hospice Pharmacy Services
Optum Hospice Pharmacy Services Administrator
Optum Infusion Services 100, Inc.
New York
Advanced Care of New Jersey Inc.
Optum Infusion Services 101, Inc.
New York
 
Optum Infusion Services 103, LLC
Delaware
 
Optum Infusion Services 201, Inc.
Florida
 
Optum Infusion Services 202, Inc.
Florida
 
Optum Infusion Services 203, Inc.
Florida
 
Optum Infusion Services 205, Inc.
Florida
 





Optum Infusion Services 206, Inc.
Alabama
 
Optum Infusion Services 207, Inc.
Alabama
 
Optum Infusion Services 208, Inc.
North Carolina
 
Optum Infusion Services 301, LP
Oklahoma
AxelaCare
Optum Infusion Services 302, LLC
Nebraska
 
Optum Infusion Services 308, LLC
Arizona
AxelaCare
Optum Infusion Services 401, LLC
California
 
Optum Infusion Services 403, LLC
California
 
Optum Infusion Services 404, LLC
Oregon
 
Optum Infusion Services 501, Inc.
Delaware
 
Optum Insurance of Ohio, Inc.
Ohio
 
Optum Labs Dimensions, Inc.
Delaware
 
Optum Labs International (UK) Ltd.
England and Wales
 
Optum Labs, Inc.
Delaware
 
Optum Life Sciences (Canada) Inc.
Ontario
 
Optum Management Consulting (Shanghai) Co., Ltd.
China
 
Optum Networks of New Jersey, Inc.
Delaware
OptumCare Network of New Jersey
OrthoNet of the Mid-Atlantic
Optum of New York, Inc.
New York
 
Optum Operations (Ireland) Unlimited Company
Ireland
 
Optum Palliative and Hospice Care of Pennsylvania, Inc.
Tennessee
Evercare Hospice & Palliative Care
Optum Palliative and Hospice Care of Texas, Inc.
Tennessee
Evercare Hospice & Palliative Care
Optum Palliative and Hospice Care, Inc.
Delaware
EverCare
Evercare Hospice
Evercare Hospice and Palliative Care
Evercare Hospice and Palliative Care of Colorado Springs
Evercare Hospice and Palliative Care of Denver
Evercare Palliative Care
Evercare Palliative Services
Evercare Palliative Services of Colorado Springs
Evercare Palliative Services of Denver
Evercare Palliative Services of Dover
Evercare Palliative Services of Vienna
Optum Perks LLC
Delaware
 
Optum Pharmacy 701, LLC
Delaware
 
Optum Pharmacy 702, LLC
Indiana
BriovaRx
Optum Pharmacy 703, LLC
Nevada
BriovaRX
Optum Pharmacy 705, LLC
Alabama
 
Optum Public Sector Solutions, Inc.
Delaware
 
Optum Rocket, Inc.
Delaware
 
Optum Senior Services, LLC
Alabama
SeniorScript
Optum Services (Ireland) Limited
Dublin
 
Optum Services (Puerto Rico) LLC
Puerto Rico
 
Optum Services, Inc.
Delaware
 
Optum Solutions do Brasil – Tecnologia e Serviços de Suporte Ltda.
Paraná
 
Optum Solutions UK Holdings Limited
United Kingdom
 
Optum Technology, LLC
Delaware
 





Optum UK Solutions Group Limited
United Kingdom
 
Optum Women's and Children's Health, LLC
Delaware
 
Optum, Inc.
Delaware
 
Optum360 Services, Inc.
Delaware
 
Optum360 Solutions, LLC
Delaware
 
Optum360, LLC
Delaware
 
OptumCare ACO Florida, LLC
Florida
JSA Care Partners, LLC
Optumcare ACO Florida, LLC
OptumCare ACO Holdings, LLC
California
HealthCare Partners Accountable Care Organization, LLC
OptumCare ACO Holdings, LLC
OptumCare ACO New Mexico, LLC
Delaware
DaVita Medical ACO New Mexico
DaVita Medical ACO New Mexico, LLC
NM Care ACO, LLC
Optumcare ACO New Mexico, LLC
OptumCare Clinical Trials, LLC
Delaware
DaVita Clinical Trials, LLC
HCP Clinical Research
HCP Clinical Research, LLC
OptumCare Colorado ASC, LLC
Colorado
DaVita Medical Colorado ASC
Digestive Disease Endoscoopy
Optum Digestive Disease
Optum Endoscopy
OptumCare Colorado Springs, LLC
Colorado
Colorado Springs Health Partners
DaVita Medical Group
DaVita Medical Group Colorado
DaVita Medical Group Colorado Springs
Optum
Digestive Disease Clinic
Optum Digestive Disease
OptumCare Colorado, LLC
Colorado
 
OptumCare Endoscopy Center New Mexico, LLC
New Mexico
 
OptumCare Florida CI, LLC
Delaware
 
OptumCare Florida, LLC
Delaware
Optum
DaVita Medical Group
OptumCare Health Plan of California, Inc.
Delaware
DaVita Health Plan of California, Inc.
OptumCare Holdings Colorado, LLC
Colorado
 
OptumCare Holdings New Mexico, LLC
New Mexico
 
OptumCare Holdings, LLC
California
 
OptumCare Management, LLC
California
 
OptumCare New Mexico, LLC
Delaware
 
OptumCare New York IPA, Inc.
New York
 
OptumCare South Florida, LLC
Florida
Optum
DaVita Medical Group
OptumHealth Care Solutions, LLC
Delaware
UnitedHealth Group Research & Development
OptumHealth Financial Services, Inc.
Delaware
 
OptumHealth Holdings, LLC
Delaware
 
OptumHealth International B.V.
Netherlands
 
OptumInsight Holdings, LLC
Delaware
 
OptumInsight India Private Limited
India
 
OptumInsight Life Sciences, Inc.
Delaware
Innovus
QualityMetric Incorporated





OptumInsight, Inc.
Delaware
Ingenix
Ingenix, Inc.
Optum Optum, Inc.
OptumRx Administrative Services, LLC
Texas
 
OptumRx Discount Card Services, LLC
Delaware
 
OptumRx Group Holdings, Inc.
Delaware
 
OptumRx Health Solutions, LLC
Delaware
 
OptumRx Holdings I, LLC
Delaware
 
OptumRx Holdings, LLC
Delaware
 
OptumRx Home Delivery of Ohio, LLC
Ohio
OptumRx at Nationwide
OptumRx of Ohio
OptumRx IPA III, Inc.
New York
 
OptumRx NY IPA, Inc.
New York
 
OptumRx of Pennsylvania, LLC
Delaware
FutureScripts Secure
OptumRx PBM of Illinois, Inc.
Delaware
 
OptumRx PBM of Maryland, LLC
Nevada
OptumRx PBM Administrator of Maryland
OptumRx PBM of Pennsylvania, LLC
Pennsylvania
FutureScripts
OptumRx PBM of Puerto Rico, LLC
Nevada
 
OptumRx PBM of Wisconsin, LLC
Wisconsin
OptumRx PBM Administrator of Wisconsin
OptumRx PD of Pennsylvania, LLC
Pennsylvania
 
OptumRx Pharmacy of Nevada, Inc.
Nevada
Culinary
Culinary Pharmacy
OptumRx Pharmacy, Inc.
Delaware
 
OptumRx, Inc.
California
FirstLine Medical
hi HealthInnovations
OptumRx
OptumRx PBM Administrator of California
OptumRx, Inc.
OptumServe Technology Services, Inc.
Maryland
Optum, Inc.
Q.S.S., Inc.
QSSI
Quality Software Services
Quality Software Services, Inc.
Orlando Center for Outpatient Surgery, L.P.
Georgia
 
OrthoNet Holdings, Inc.
Delaware
 
OrthoNet LLC
New York
OrthoNet of New York
OrthoNet New York IPA, Inc.
New York
 
OrthoNet of the South, Inc.
Delaware
 
OrthoNet Services, Inc.
Delaware
 
OrthoNet West, Inc.
Delaware
 
OSB – Tecnologia e Serviços de Suporte Ltda.
Brazil
 
Ovations, Inc.
Delaware
 
Oxford Benefit Management, Inc.
Connecticut
 
Oxford Health Insurance, Inc.
New York
 
Oxford Health Plans (CT), Inc.
Connecticut
 
Oxford Health Plans (NJ), Inc.
New Jersey
 
Oxford Health Plans (NY), Inc.
New York
 
Oxford Health Plans LLC
Delaware
Oxford Agency - Oxford Health Plans Inc.
P2P Link, LLC
Delaware
 





Pacific Casualty Company, Inc.
Hawaii
 
PacifiCare Life and Health Insurance Company
Indiana
 
PacifiCare Life Assurance Company
Colorado
 
PacifiCare of Arizona, Inc.
Arizona
PacifiCare
Secure Horizons
PacifiCare of Colorado, Inc.
Colorado
Comprecare, Inc.
Secure Horizons
PacifiCare of Nevada, Inc.
Nevada
PacifiCare
Pacífico S.A. Entidad Prestadora de Salud
Peru
 
Paoli Ambulatory Surgery Center
Pennsylvania
 
Paoli Surgery Center, L.P.
Tennessee
 
Parkway Surgery Center, LLC
Delaware
 
Pasteur Plaza Surgery Center GP, Inc.
Delaware
 
PatientsLikeMe LLC
Delaware
 
Patrimonio Autónomo Nueva Clínica - PANC.
Colombia
 
Payment Resolution Services, LLC
Tennessee
 
PCCCV, Inc.
California
 
Peoples Health, Inc.
Louisiana
 
Pharmacy Software Holdco, Inc.
Pennsylvania
 
PHC Subsidiary Holdings, LLC
Texas
 
Physician Alliance of the Rockies, LLC
Colorado
 
PHYSICIANS DAY SURGERY CENTER, LLC
Florida
 
Physicians Health Choice of Texas, LLC
Texas
Physicians Health Choice
Physicians Health Plan of Maryland, Inc.
Maryland
 
Physicians Plaza Holdings, LLC
California
 
Plano de Saúde Ana Costa Ltda.
Brazil
 
Plus One Health Management Puerto Rico, Inc.
Puerto Rico
 
Plus One Holdings, Inc.
Delaware
 
PMI Acquisition, LLC
Delaware
 
PMSI Holdings, LLC
Delaware
 
PMSI Settlement Solutions, LLC
Florida
Optum Settlement Solutions
PMSI, LLC
Florida
Alaska Business License
Optum
Optum Workers Compensation Services of Florida
Polar II Fundo de Investimento em Participações Multiestrategia
Brazil
 
Polo Holdco, LLC
Delaware
 
POMCO Network, Inc.
New York
 
POMCO, Inc.
New York
EM Risk Management
Pomco
Pomco Group Benefit Administrators
Pomerado Outpatient Surgical Center, Inc.
California
 
Pomerado Outpatient Surgical Center, L.P.
California
 
PPH Holdings, LLC
Delaware
 
Precision Dialing Services, Inc.
Delaware
 
Preferred Care Partners Holding, Corp.
Florida
 
Preferred Care Partners Medical Group, Inc.
Florida
 
Preferred Care Partners, Inc.
Florida
 





Premier Choice ACO, Inc.
California
 
Premier Surgery Center of Louisville, L.P.
Tennessee
 
Prime Health, Inc.
Nevada
Med One Works
PrimeCare Medical Network, Inc.
California
 
PrimeCare of Citrus Valley, Inc.
California
 
PrimeCare of Corona, Inc.
California
 
PrimeCare of Hemet Valley, Inc.
California
 
PrimeCare of Inland Valley, Inc.
California
 
PrimeCare of Moreno Valley, Inc.
California
 
PrimeCare of Redlands, Inc.
California
 
PrimeCare of Riverside, Inc.
California
 
PrimeCare of San Bernardino, Inc.
California
 
PrimeCare of Sun City, Inc.
California
 
PrimeCare of Temecula, Inc.
California
 
Procura Management, Inc.
Delaware
Optum Managed Care Services
Progressive Enterprises Holdings, Inc.
Delaware
 
Progressive Medical, LLC
Ohio
Alaska Business License
Optum Workers Compensation Services of Ohio
PMI Medical Solutions, LLC
PMI Solutions, LLC
Progressive Medical Solutions, LLC
Progressive Medical, LLC of Ohio
ProHEALTH Fitness of Lake Success, LLC
New York
 
ProHEALTH Medical Management, LLC
Delaware
 
ProHealth Physicians ACO, LLC
Connecticut
 
ProHealth Physicians, Inc.
Connecticut
 
ProHealth Proton Center Management, LLC
Delaware
 
Promotora Country S.A.
Colombia
 
Pronounced Health Solutions, Inc.
Delaware
 
Prosemedic S.A.C.
Peru
 
Prospero Management Services, LLC
Delaware
 
Pueblo-SCA Surgery Center, LLC
Delaware
 
Pulse Platform, LLC
Delaware
 
QoL Acquisition Holdings Corp.
Delaware
 
QuarterMaster Newco, LLC
Delaware
 
Rally Health, Inc.
Delaware
 
Real Appeal, Inc.
Delaware
 
Recaudación y Cobranzas Honodav Ltda.
Chile
 
Redlands Ambulatory Surgery Center
California
 
Redlands-SCA Surgery Centers, Inc.
California
 
Reliant MSO, LLC
Delaware
 
Research Surgical Center, LLC
Colorado
Surgical Center of the Rockies
River Valley ASC, LLC
Connecticut
 
Riverside Electronic Healthcare Resources, Inc.
California
 
Riverside Medical Management, LLC
Delaware
 
Riverside Surgical Center of Meadowlands, LLC
New Jersey
Riverside Surgical Center of Rutherford
Riverside Surgical Center of Newark, LLC
New Jersey
 





Rocky Mountain Health Maintenance Organization, Incorporated
Colorado
Rocky Mountain Health Plans
Rocky Mountain HMO
Rocky Mountain HealthCare Options, Inc.
Colorado
HealthCare Options, Inc.
Rocky Mountain HCO
Sacred Heart ASC, LLC
Florida
 
Saden S.A.
Chile
 
Salem Surgery Center, LLC
Oregon
 
Salveo Specialty Pharmacy, Inc.
Delaware
 
Sand Lake SurgiCenter, LLC
Florida
 
Santa Cruz Endoscopy Center, LLC
California
 
Santa Helena Assistência Médica S.A.
Brazil
 
Santos Administração e Participações S.A.
Brazil
 
Savvysherpa Administrative Services, LLC
Minnesota
 
Savvysherpa Asia, Inc.
Phillipines
 
Savvysherpa, LLC
Delaware
UnitedHealth Group Research & Development
SC Affiliates, LLC
Delaware
 
SCA Alaska Surgery Center, inc.
Alaska
 
SCA Athens, LLC
Delaware
 
SCA Austin Holdings, LLC
Delaware
 
SCA BOSC Holdings, LLC
Delaware
 
SCA California Surgical Holdings, LLC
Delaware
 
SCA Capital, LLC
Delaware
 
SCA Cedar Park Holdings, LLC
Delaware
 
SCA Clifton, LLC
Delaware
 
SCA Danbury Surgical Center, LLC
Delaware
 
SCA Development, LLC
Delaware
 
SCA eCode Solutions Private Limited
India
 
SCA EHSC Holdings, LLC
Delaware
 
SCA EWASC Holdings, LLC
Delaware
 
SCA Hays Holdings, LLC
Delaware
 
SCA Heartland Holdings, LLC
Delaware
 
SCA HoldCo, Inc.
Delaware
 
SCA Holding Company, Inc.
Delaware
 
SCA Holdings, Inc.
California
 
SCA IEC Holdings, LLC
Delaware
 
SCA Indiana Holdings, LLC
Delaware
 
SCA Nashville ASC, LLC
Tennessee
 
SCA of Clarksville, Inc.
Tennessee
 
SCA Pacific Holdings, Inc.
California
 
SCA Pennsylvania Holdings, LLC
Delaware
 
SCA Premier Surgery Center of Louisville, LLC
Delaware
 
SCA Rockledge JV, LLC
Delaware
 
SCA ROCS Holdings, LLC
Delaware
 
SCA Sage Medical MSO, LLC
Delaware
 
SCA Sage Medical, LLC
Delaware
 
SCA Southwestern PA, LLC
Delaware
 





SCA Specialists of Florida, LLC
Delaware
 
SCA SSC Holdings, LLC
Delaware
 
SCA SSSC Holdings, LLC
Delaware
 
SCA Stonegate Holdings, LLC
Delaware
 
SCA Surgery Center of Cullman, LLC
Delaware
 
SCA Surgery Holdings, LLC
Delaware
 
SCA Surgery Partners, LLC
Delaware
 
SCA Surgicare of Laguna Hills, LLC
Delaware
 
SCA Teammate Support Network
Alabama
 
SCA-Albuquerque Surgery Properties, Inc.
New Mexico
 
SCA-Alliance, LLC
Delaware
 
SCA-Anne Arundel, LLC
Delaware
 
SCA-Applecare Partners, LLC
Delaware
 
SCA-Bethesda, LLC
Delaware
 
SCA-Blue Ridge, LLC
Delaware
 
SCA-Bonita Springs, LLC
Delaware
 
SCA-Brandon, LLC
Delaware
 
SCA-Castle Rock, LLC
Delaware
 
SCA-Central Florida, LLC
Florida
 
SCA-Charleston, LLC
Delaware
 
SCA-Chatham, LLC
Delaware
 
SCA-Chevy Chase, LLC
Delaware
 
SCA-Citrus, Inc.
Tennessee
 
SCA-Colorado Springs, LLC
Delaware
 
SCA-Connecticut Partners, LLC
Delaware
 
SCA-Davenport, LLC
Delaware
 
SCA-Denver Physicians Holdings, LLC
Delaware
 
SCA-Denver, LLC
Delaware
 
SCA-Derry, LLC
Delaware
 
SCA-Doral, LLC
Delaware
 
SCA-Downey, LLC
Delaware
 
SCA-DRY CREEK, LLC
Delaware
 
SCA-Dublin, LLC
Delaware
 
SCA-Encinitas, Inc.
Delaware
 
SCA-Eugene, Inc.
Tennessee
 
SCA-First Coast, LLC
Delaware
 
SCA-Florence, LLC
Delaware
 
SCA-Fort Collins, Inc.
Colorado
 
SCA-Fort Walton, Inc.
Tennessee
 
SCA-Franklin, LLC
Delaware
 
SCA-Frederick, LLC
Delaware
 
SCA-Freeway Holdings, LLC
Delaware
 
SCA-Ft. Myers, LLC
Delaware
 
SCA-Gainesville, LLC
Delaware
 
SCA-Gladiolus, LLC
Delaware
 
SCA-GRANTS PASS, LLC
Delaware
 





SCA-Grove Place, LLC
Delaware
 
SCA-Hagerstown, LLC
Delaware
 
SCA-Hamden, LLC
Delaware
 
SCA-Hilton Head, LLC
Delaware
 
SCA-Honolulu, LLC
Delaware
 
SCA-Houston Executive, LLC
Delaware
 
SCAI Holdings, LLC
Delaware
 
SCA-Illinois, LLC
Delaware
 
SCA-IT Holdings, LLC
Delaware
 
SCA-JPM Holdings, LLC
Delaware
 
SCA-Kissing Camels Holdings, LLC
Delaware
 
SCA-Main Street, LLC
Delaware
 
SCA-Marina del Rey, LLC
California
 
SCA-MC VBP, Inc.
Delaware
 
SCA-Mecklenburg Development Corp.
North Carolina
 
SCA-Memorial City, LLC
Delaware
 
SCA-Merritt, LLC
Delaware
 
SCA-Midlands, LLC
Delaware
 
SCA-Midway Management, LLC
Illinois
 
SCA-Mobile, LLC
Delaware
 
SCA-Mokena Properties, LLC
Delaware
 
SCA-Mokena, LLC
Delaware
 
SCA-Morris County, LLC
Delaware
 
SCA-Mt. Pleasant, LLC
Delaware
 
SCA-Naperville, LLC
Delaware
 
SCA-Naples, LLC
Delaware
 
SCA-ND VBP, Inc.
Delaware
 
SCA-New Jersey, LLC
Delaware
 
SCA-Newport Beach, LLC
California
 
Scanner Centromed S.A.
Chile
 
SCA-Northeast Georgia Health, LLC
Tennessee
 
SCA-Palm Beach MSO Holdings, LLC
Delaware
 
SCA-Palm Beach, LLC
Delaware
 
SCA-Paoli, LLC
Delaware
 
SCA-Phoenix, LLC
Delaware
 
SCA-Pocono, LLC
Delaware
 
SCA-PORTLAND, LLC
Delaware
 
SCA-Practice Partners Holdings, LLC
Delaware
 
SCA-River Valley, LLC
Delaware
 
SCA-Riverside Partners, LLC
Delaware
 
SCA-Riverside, LLC
Delaware
 
SCA-Rockville, LLC
Delaware
 
SCA-Sacred Heart Holdings, LLC
Delaware
 
SCA-San Diego, Inc.
Delaware
 
SCA-San Luis Obispo, LLC
Delaware
 
SCA-Sand Lake, LLC
Florida
 





SCA-Santa Rosa, Inc.
Nevada
 
SCA-Shelby Development Corp.
Tennessee
 
SCA-Somerset, LLC
Delaware
 
SCA-South Jersey, LLC
Delaware
 
SCA-Sparta, LLC
Delaware
 
SCA-Spartanburg Holdings, LLC
Delaware
 
SCA-St. Louis, LLC
Delaware
 
SCA-St. Lucie, LLC
Delaware
 
SCA-SurgiCare, LLC
Delaware
 
SCA-Swiftpath, LLC
Delaware
 
SCA-VERTA, LLC
Delaware
 
SCA-Wake Forest, LLC
Delaware
 
SCA-Western Connecticut, LLC
Delaware
 
SCA-Westover Hills, LLC
Delaware
 
SCA-Wilmington, LLC
Delaware
 
SCA-Wilson, LLC
Delaware
 
SCA-Winchester, LLC
Delaware
 
SCA-Winter Park, Inc.
Tennessee
 
SCA-Woodlands Holdings, LLC
Delaware
 
SCP Specialty Infusion, LLC
Delaware
 
ScriptSwitch Limited
United Kingdom
 
Seisa Serviços Integrados de Saúde Ltda.
Brazil
 
Senate Street Surgery Center, LLC
Indiana
 
Senior Benefits, L.L.C.
Arizona
 
Serquinox Holdings LLC
Delaware
 
Servicios de Entrenamiento en Competencias Clínicas Ltda.
Chile
 
Servicios Integrados de Salud Ltda.
Chile
 
Servicios Médicos Amed Quilpué S.A.
Chile
 
Servicios Médicos Bío Bío Limitada
Chile
 
Servicios Médicos Ciudad del Mar Ltda.
Chile
 
Servicios Médicos Santa María Limitada
Chile
 
Servicios Médicos Vespucio Ltda.
Chile
 
SharedClarity LLC
Delaware
 
SHC Atlanta, LLC
Delaware
 
SHC Austin, Inc.
Georgia
 
SHC Hawthorn, Inc.
Georgia
 
SHC Melbourne, Inc.
Georgia
 
Shelby Surgery Properties, Inc.
Tennessee
 
Sierra Health and Life Insurance Company, Inc.
Nevada
 
Sierra Health Services, Inc.
Nevada
 
Sierra Health-Care Options, Inc.
Nevada
 
Sierra Home Medical Products, Inc.
Nevada
Southwest Medical Associates, Inc.
Southwest Medical Pharmacy & Home Medical Equipment
THC of Nevada
Sierra Nevada Administrators, Inc.
Nevada
 
Sistema de Administración Hospitalaria S.A.C.
Peru
 





Small Business Insurance Advisors, Inc.
Texas
 
Sobam – Centro Médico Hospitalar S.A.
Brazil
 
Sociedad de Inversiones Santa María S.A.
Chile
 
Sociedad Editorial para la Ciencia Limitada.
Colombia
 
Somerset Outpatient Surgery, L.L.C.
New Jersey
 
Southwest Medical Associates, Inc.
Nevada
OptumCare Community Center
OptumCare Medical Group
Sierra Home Medical Products, Inc.
SMA Lifestyle Center
Southwest Hospitalist Services Group Soutwest Medical Pharmacy & Home Medical Equipment
Southwest Michigan Health Network Inc.
Michigan
 
Southwest Surgery Center, LLC
Illinois
Center for Minimally Invasive Surgery
Southwest Surgical Center of Bakersfield, L.P.
California
 
Space Coast Surgical Center, Ltd.
Florida
 
Specialists in Urology Surgery Center, LLC
Florida
 
Specialized Pharmaceuticals, Inc.
Pennsylvania
 
Specialty Benefits, LLC
Delaware
EyeFit
EyeFit Vision Center
EyeFit Vision Centers
Specialty Surgical Center, LLC
New Jersey
 
Spectera of New York, IPA, Inc.
New York
 
Spectera, Inc.
Maryland
 
SPINETRACK 20/20, Inc.
California
 
Spotlite, Inc.
Delaware
 
SRPS, LLC
Delaware
 
St. Cloud Surgical Center, LLC
Delaware
 
Stonegate Surgery Center, L.P.
Texas
 
Streamlines Health, LLC
Minnesota
 
SunSurgery, LLC
Delaware
 
Surgery Center at Cherry Creek, LLC
Colorado
 
Surgery Center at Kissing Camels, LLC
Colorado
 
Surgery Center Holding, LLC
Delaware
 
Surgery Center of Boca Raton, Inc.
Florida
 
Surgery Center of Clarksville, L.P.
Tennessee
 
Surgery Center of Colorado Springs, LLC
Delaware
 
Surgery Center of Des Moines, LLC
Delaware
 
Surgery Center of Easton, LLC
Delaware
 
Surgery Center of Ellicott City, Inc.
Delaware
 
Surgery Center of Louisville, LLC
Delaware
 
Surgery Center of Maui, LLC
Delaware
 
Surgery Center of Muskogee, LLC
Delaware
 
Surgery Center of Rockville, L.L.C.
Maryland
 
Surgery Center of Southern Pines, LLC
Delaware
 
Surgery Center of Spokane, LLC
Delaware
 
Surgery Center of Summerlin, LLC
Delaware
 
Surgery Center of The Woodlands, LLC
Texas
 
Surgery Center of Vero Beach, Inc.
Tennessee
 





Surgery Center of Wilmington Properties, LLC
North Carolina
 
Surgery Center of Wilmington, LLC
North Carolina
 
Surgery Centers of Des Moines, Ltd., an Iowa Limited Partnership
Iowa
 
Surgery Centers-West Holdings, LLC
Delaware
 
Surgical Care Affiliates Political Action Committee
Alabama
 
Surgical Care Affiliates, LLC
Delaware
 
Surgical Care Partners of Melbourne, LLC
Delaware
 
Surgical Center of South Jersey, Limited Partnership
New Jersey
 
Surgical Center of Tuscaloosa Holdings, LLC
Alabama
 
Surgical Health of Orlando, LLC
Florida
 
Surgical Health, LLC
Delaware
 
Surgical Hospital Holdings of Oklahoma, LLC
Delaware
 
Surgicare of Belleville, LLC
Delaware
 
Surgicare of Jackson, LLC
Delaware
 
Surgicare of Joliet, Inc.
Illinois
 
Surgicare of La Veta, Inc.
California
 
Surgicare of Minneapolis, LLC
Delaware
 
Surgicare of Mobile, LLC
Delaware
 
Surgicare of Oceanside, Inc.
California
 
Surgicare of Owensboro, LLC
Delaware
 
Surgicare of Salem, LLC
Delaware
 
Surgicare, LLC
Indiana
 
Surgicenters of Southern California, Inc.
California
 
Symphonix Health Holdings, LLC
Delaware
 
Symphonix Health Insurance, Inc.
Illinois
 
TeamMD Holdings, Inc.
Delaware
 
TeamMD Iowa, Inc.
Delaware
 
TeamMD Physicians of Texas, Inc.
Texas
UnitedHealthcare Alief Clinic
TeamUP Insurance Services, Inc.
California
 
Tecnologías de Información en Salud S.A.
Chile
 
The Advisory Board (Chile) SpA
Chile
 
The Advisory Board Company
Delaware
The Delaware Advisory Board Company
The Chesapeake Life Insurance Company
Oklahoma
 
The Lewin Group, Inc.
North Carolina
The Lewin Group Inc.
Lewin
The Magan Medical Group
California
 
The Outpatient Surgery Center of Hilton Head, LLC
South Carolina
 
The Polyclinic MSO, LLC
Delaware
 
THE SURGICAL CENTER OF THE TREASURE COAST, L.L.C.
Florida
 
Thomas Johnson Surgery Center, LLC
Maryland
 
Thousand Oaks Endoscopy Center, LLC
California
 
Three Rivers Holdings, Inc.
Delaware
 
Three Rivers Surgical Care, L.P.
Tennessee
 
Tmesys, LLC
Florida
 
Topimagem Diagnóstico por Imagem Ltda.
Brazil
 





Trails Edge Surgery Center, LLC
Florida
 
Travel Express Incorporated
Maryland
 
TriMed, LLC
Utah
 
Trio Motion, LLC
Delaware
 
Tucson Arizona Surgical Center, LLC
Arizona
 
U.S. Behavioral Health Plan, California
California
OptumHealth Behavioral Solutions of California
UHC Finance (Ireland) Unlimited Company
Dublin
 
UHC International Services, Inc.
Delaware
 
UHC of California
California
PacifiCare
PacifiCare of California
Secure Horizons
UnitedHealthcare of California
UHCG – FZE
Dubai
 
UHCG Holdings (Ireland) Limited
Ireland
 
UHCG Services (Ireland) Limited
Ireland
 
UHG Brasil Participações S.A.
Brazil
 
UHIC Holdings, Inc.
Delaware
 
UICI Funding Corp. 2
Delaware
 
UMR, Inc.
Delaware
Fiserv Health - Wausau Benefits
Unidad Médica Diagnóstico S.A.
Colombia
 
Unimerica Insurance Company
Wisconsin
Unimerica Life Insurance Company
Unimerica Life Insurance Company of New York
New York
 
Unison Health Plan of Delaware, Inc.
Delaware
UnitedHealthcare Community Plan
United Behavioral Health
California
Life Strategies
Optum Idaho
OptumHealth Behavioral Solutions
Plan 21, Incorporated
Plan 21, INCORPORATED
United Behavioral Health (Inc.)
United Behavioral Health, Inc.
United Behavioral Health of New York, I.P.A., Inc.
New York
 
United Group Reinsurance, Inc.
Placeholder until info is provided
 
United Health Foundation
Minnesota
United Health Hospice Foundation
United HealthCare Services, Inc.
Minnesota
AmeriChoice
EverCare
Health Professionals Review
Healthmarc
HealthPro
Institute for Human Resources
Optum
UHC Management Company
UHC Management Company, Inc.
United HealthCare Corporation
United HealthCare Management Company, Inc.
United HealthCare Management Services
United HealthCare Services of Minnesota
United HealthCare Services of Minnesota, Inc.
United Resource Networks
United Resource Networks, Inc.
UnitedHealthcare MedicareStore
United Management Services, Inc.
New York
 
United Resource Networks IPA of New York, Inc.
New York
 





UnitedHealth Advisors, LLC
Maine
UnitedHealthcare
UHA Insurance Agency, LLC
UnitedHealth Group Finance Inc.
Delaware
 
UnitedHealth Group Incorporated
Delaware
 
UnitedHealth Group International Finance (Ireland) Unlimited Company
Ireland
 
UnitedHealth Group International GP
Grand Cayman
 
UnitedHealth International, Inc.
Delaware
 
UnitedHealth Military & Veterans Services, LLC
Delaware
 
UnitedHealth UK Limited
United Kingdom
 
UnitedHealthcare Benefits of Texas, Inc.
Texas
PacifiCare
Secure Horizons
UnitedHealthcare Benefits Plan of California
California
 
UnitedHealthcare Children's Foundation, Inc.
Maryland
 
UnitedHealthcare Community Plan of California, Inc.
California
 
UnitedHealthcare Community Plan of Georgia, Inc.
Georgia
 
UnitedHealthcare Community Plan of Ohio, Inc.
Ohio
UnitedHealthcare Community Plan
UnitedHealthcare Community Plan of Texas, L.L.C.
Texas
United Healthcare - Texas
UnitedHealthcare Comminity Plan
UnitedHealthcare Community Plan, Inc.
Michigan
 
UnitedHealthcare Consulting & Assistance Service (Beijing) Co., Ltd.
China
 
UnitedHealthcare Europe S.á r.l.
Luxembourg
 
UnitedHealthcare Global Canada Limited
Alberta
UnitedHealthcare Global
UnitedHealthcare Global Medical (UK) Limited
United Kingdom
 
UnitedHealthcare India Private Limited
India
 
UnitedHealthcare Insurance Company
Connecticut
UnitedHealthcare Community Plan of Texas
UnitedHealthOne
UnitedHealthcare Insurance Company of Illinois
Illinois
 
UnitedHealthcare Insurance Company of New York
New York
 
UnitedHealthcare Insurance Company of the River Valley
Illinois
 
UnitedHealthcare Insurance Designated Activity Company
Ireland
 
UnitedHealthcare Integrated Services, Inc.
Arizona
UnitedHealthcare Community Plan
UnitedHealthcare International Asia, LLC
Delaware
 
UnitedHealthcare International I B.V.
Netherlands
 
UnitedHealthcare International II S.á r.l.
Luxembourg
 
UnitedHealthcare International III B.V.
Netherlands
 
UnitedHealthcare International III S.á r.l.
Luxembourg
 
UnitedHealthcare International IV S.á r.l.
Luxembourg
 
UnitedHealthcare International VI S.à r.l.
Luxembourg
 
UnitedHealthcare International VII S.à r.l.
Luxembourg
 
UnitedHealthcare International VIII S.à r.l.
Luxembourg
 
UnitedHealthcare International X S.à r.l.
Luxembourg
 
UnitedHealthcare Life Insurance Company
Wisconsin
UnitedHealthOne
UnitedHealthcare of Alabama, Inc.
Alabama
 
UnitedHealthcare of Arizona, Inc.
Arizona
 





UnitedHealthcare of Arkansas, Inc.
Arkansas
Complete Health
UnitedHealthcare of Colorado, Inc.
Colorado
MetraHealth Care Plan
UnitedHealthcare of Florida, Inc.
Florida
Community and State Plan of Florida
UnitedHealthcare Community Plan
UnitedHealthcare Community Plan of Florida
UnitedHealthcare of Georgia, Inc.
Georgia
United HealthCare of Georgia
UnitedHealthcare of Illinois, Inc.
Illinois
 
UnitedHealthcare of Kentucky, Ltd.
Kentucky
United HealthCare of Kentucky, L.P.
UnitedHealthcare of Louisiana, Inc.
Louisiana
UnitedHealthcare Community Plan
UnitedHealthcare of Mississippi, Inc.
Mississippi
 
UnitedHealthcare of New England, Inc.
Rhode Island
 
UnitedHealthcare of New Mexico, Inc.
New Mexico
 
UnitedHealthcare of New York, Inc.
New York
UnitedHealthcare Community Plan
UnitedHealthcare of North Carolina, Inc.
North Carolina
 
UnitedHealthcare of Ohio, Inc.
Ohio
 
UnitedHealthcare of Oklahoma, Inc.
Oklahoma
PacifiCare
PacifiCare Health Options
PacifiCare of Oklahoma
Secure Horizons
UnitedHealthcare of Oregon, Inc.
Oregon
 
UnitedHealthcare of Pennsylvania, Inc.
Pennsylvania
UnitedHealthcare Community Plan
UnitedHealthcare Community Plan for Families
UnitedHealthcare Community Plan for Kids
UnitedHealthcare Community Plan of Pennsylvania
UnitedHealthcare Dual Complete
UnitedHealthcare of South Carolina, Inc.
South Carolina
 
UnitedHealthcare of Texas, Inc.
Texas
 
UnitedHealthcare of the Mid-Atlantic, Inc.
Maryland
 
UnitedHealthcare of the Midlands, Inc.
Nebraska
 
UnitedHealthcare of the Midwest, Inc.
Missouri
 
UnitedHealthcare of Utah, Inc.
Utah
UnitedHealthcare of Idaho, Inc.
UnitedHealthcare of Washington, Inc.
Washington
PacifiCare
Secure Horizons
UnitedHealthcare
UnitedHealthcare Community Plan
UnitedHealthcare of Wisconsin, Inc.
Wisconsin
UnitedHealthcare of Wisconsin - Personal Care Plus
UnitedHealthcare Plan of the River Valley, Inc.
Illinois
 
UnitedHealthcare Service LLC
Delaware
 
UnitedHealthcare Specialty Benefits, LLC
Maine
DCG RESOURCE OPTIONS ADMINISTRATORS, LLC
UnitedHealthcare Specialty Benefits
WorkUp, LLC
UnitedHealthcare, Inc.
Delaware
 
UpFront Insurance Agency, LLC
Minnesota
 
Upland Holdings, LLC
California
 
Upland Outpatient Surgical Center, L.P.
California
 
Urgent Care Holdings, Inc.
Delaware
 
Urgent Care MSO, LLC
Delaware
 





Urology Associates of North Texas, P.L.L.C.
Texas
 
USHEALTH Academy, Inc.
Texas
 
USHEALTH Administrators, LLC
Delaware
 
USHEALTH Advisors, L.L.C.
Texas
 
USHEALTH Career Agency, Inc.
Delaware
 
USHEALTH Funding, Inc.
Delaware
 
USHEALTH Group, Inc.
Delaware
 
USMD Administrative Services, L.L.C.
Texas
 
USMD Affiliated Services
Texas
USMD Physician Services
USMD Holdings, Inc.
Delaware
 
USMD Inc.
Texas
 
USMD PPM, LLC
Texas
 
Valley Hospital, L.L.C.
Washington
 
Valley Physicians Network, Inc.
California
 
VERTA MANAGEMENT SERVICES, LLC
Delaware
 
Vida Tres Internacional S.A.
Chile
 
Vidaintegra S.A.
Chile
 
Vivify Health Canada, Inc.
British Columbia
 
Vivify Health, Inc.
Delaware
 
Wauwatosa Outpatient Surgery Center, LLC
Delaware
 
Wauwatosa Surgery Center, Limited Partnership
Wisconsin
 
Wayland Square Surgicare Acquisition, L.P.
Rhode Island
 
Wayland Square Surgicare GP, Inc.
Rhode Island
 
WebInsure Benefits, LLC
Delaware
WEBINSURE BENEFITS INSURANCE SERVICES LLC
WellMed Medical Management of Florida, Inc.
Florida
Preferred Care Partners Medical Group of Hialeah
Preferred Care Partners Medical Group of Little Havana
Preferred Care Partners Medical Group of Red Road
Preferred Care Partners Medical Group of West Hialeah
Preferred Care Partners Medical Group of Westchester
WellMed at 9th Ave. North
WellMed at Bartow
WellMed at Fort Pierce
WellMed at Haines City
WellMed at Haverford Ave.
WellMed at Lake Copeland
WellMed at Longwood
WellMed at Oak Commons
WellMed at Plant City - Family Practice Center
WellMed at Saint Isabel
WellMed at SE Lakeland
WellMed at South Parsons
WellMed at Southwest Orlando
WellMed at Stonerock Lake
WellMed Medical Group
WellMed Medical Management, Inc.
Texas
 
West Coast Endoscopy Holdings, LLC
Delaware
 
Western Connecticut Orthopedic Surgical Center, LLC
Connecticut
 
WESTMED Practice Partners LLC
Delaware
 





WillowB Labs LLC
Delaware
 
Wilmington ASC, LLC
North Carolina
 
Winchester Endoscopy, LLC
Illinois
 
Winter Park, LLC
Tennessee
 
XLHealth Corporation
Maryland
XLHealth
XLHealth Corporation India Private Limited
India
 
Your Health Options Insurance Services, Inc.
California
 





Exhibit 23.1

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We consent to the incorporation by reference in Registration Statement No. 333-216150 on Form S-3, No. 333-105877 on Form S-4, Nos. 333-236349, 333-174436, 333-174437, 333-205824, 333-205826, 333-221642, 333-224253, 333-224254 and 333-234018 on Form S-8 and Post-Effective Amendment on Form S-8 to Registration Statement File No. 333-216153 on Form S-4 of our reports dated February 14, 2020, relating to the consolidated financial statements and financial statement schedules of UnitedHealth Group Incorporated and Subsidiaries, and the effectiveness of UnitedHealth Group Incorporated and Subsidiaries' internal control over financial reporting, appearing in this Annual Report on Form 10-K of UnitedHealth Group Incorporated for the year ended December 31, 2019.

 
/S/ DELOITTE & TOUCHE LLP
 
Minneapolis, Minnesota
February 14, 2020




EXHIBIT 24.1

POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Marianne D. Short, Dannette L. Smith, Kuai H. Leong and Faraz A. Choudhry, and each of them, his or her true and lawful attorneys-in-fact and agents, each acting alone, with full power of substitution and resubstitution, to sign, execute and file with the Securities and Exchange Commission (or any other governmental or regulatory authority), for us and in our names in the capacities indicated below, an Annual Report on Form 10-K for the year ended December 31, 2019 for UnitedHealth Group Incorporated, and any and all amendments thereto, with all exhibits and any and all documents required to be filed with respect thereto, granting unto said attorneys-in-fact and agents and each of them, full power and authority to do and to perform each and every act and thing necessary or desirable to be done in and about the premises in order to effectuate the same as fully to all intents and purposes as he or she might or could do if personally present, hereby ratifying and confirming all that said attorneys-in-fact and agents, or any of them, may lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned have executed this Power of Attorney as of the date set forth below.
/s/ William C. Ballard, Jr.
 
/s/ F. William McNabb III
William C. Ballard, Jr.
 
F. William McNabb III
Director
 
Director
Dated: February 14, 2020
 
Dated: February 14, 2020
 
 
 
/s/ Richard T. Burke
 
/s/ Valerie Montgomery Rice, M.D.
Richard T. Burke
 
Valerie Montgomery Rice, M.D.
Director
 
Director
Dated: February 14, 2020
 
Dated: February 14, 2020
 
 
 
/s/ Timothy P. Flynn
 
/s/ John H. Noseworthy
Timothy P. Flynn
 
John H. Noseworthy, M.D.
Director
 
Director
Dated: February 14, 2020
 
Dated: February 14, 2020
 
 
 
/s/ Stephen J. Hemsley
 
/s/ Glenn M. Renwick
Stephen J. Hemsley
 
Glenn M. Renwick
Director
 
Director
Dated: February 14, 2020
 
Dated: February 14, 2020
 
 
 
/s/ Michele J. Hooper
 
/s/ Gail R. Wilensky, Ph.D.
Michele J. Hooper
 
Gail R. Wilensky, Ph.D.
Director
 
Director
Dated: February 14, 2020
 
Dated: February 14, 2020






EXHIBIT 31.1
CERTIFICATIONS PURSUANT TO SECTION 302 OF THE
SARBANES-OXLEY ACT OF 2002
Certification of Principal Executive Officer

 I, David S. Wichmann, certify that:

1.
I have reviewed this report on Form 10-K of UnitedHealth Group Incorporated (the “registrant”);
2.
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.
The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
a)
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b)
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c)
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d)
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
5.
The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
a)
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
b)
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

 
February 14, 2020
/s/    DAVID S. WICHMANN
 
David S. Wichmann
Chief Executive Officer
 
 






Certification of Principal Financial Officer

I, John F. Rex certify that:

1.
I have reviewed this report on Form 10-K of UnitedHealth Group Incorporated (the “registrant”);
2.
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.
The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
a)
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b)
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c)
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d)
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
5.
The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
a)
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
b)
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.


 
February 14, 2020
/s/ JOHN F. REX
 
John F. Rex
Executive Vice President and Chief Financial Officer






EXHIBIT 32.1
CERTIFICATIONS PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
Certification of Principal Executive Officer
In connection with the report of UnitedHealth Group Incorporated (the “Company”) on Form 10-K for the period ended December 31, 2019 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, David S. Wichmann, certify pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:
(1)
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2)
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

 
February 14, 2020
/s/    DAVID S. WICHMANN
 
David S. Wichmann
Chief Executive Officer

Certification of Principal Financial Officer
In connection with the report of UnitedHealth Group Incorporated (the “Company”) on Form 10-K for the period ended December 31, 2019 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, John F. Rex, certify pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:
(1)
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2)
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

 
February 14, 2020
/s/ JOHN F. REX
 
John F. Rex
Executive Vice President and Chief Financial Officer