Fair Value

3 Months Ended

Mar. 31, 2026

Assets and liabilities recorded at fair value in our consolidated balance sheets are categorized based upon the level of judgment associated with the inputs used to measure their fair value. These assets and liabilities are classified into one of three levels of hierarchy defined by GAAP.

For a description of the methods and assumptions that are used to estimate and determine the fair value hierarchy classification for each class of financial instruments, see Note 7, “Fair Value,” to our audited consolidated financial statements as of and for the year ended December 31, 2025 included in Part II, Item 8 of our 2025 Annual Report on Form 10-K.

A summary of fair value measurements by level for assets and liabilities measured at fair value on a recurring basis at March 31, 2026 and December 31, 2025 is as follows:


	Level I		Level II		Level III		Total
March 31, 2026
Assets:
Cash equivalents	$	5,735	$	—	$	—	$	5,735
Fixed maturity securities, available-for-sale:
United States Government securities	—		1,360		—		1,360
Government sponsored securities	—		56		—		56
Foreign government securities	—		18		—		18
States, municipalities and political subdivisions, tax-exempt	—		3,575		—		3,575
Corporate securities	—		13,486		426		13,912
Residential mortgage-backed securities	—		3,284		7		3,291
Commercial mortgage-backed securities	—		2,058		—		2,058
Other asset-backed securities	—		1,880		869		2,749
Total fixed maturity securities, available-for-sale	—		25,717		1,302		27,019
Equity securities:
Exchange traded funds	1,428		—		—		1,428
Common equity securities	—		35		—		35
Private equity securities	—		—		48		48
Total equity securities	1,428		35		48		1,511
Other invested assets - common equity securities	4		—		—		4
Securities lending collateral	—		3,004		—		3,004
Derivatives - other assets	—		44		—		44
Total assets	$	7,167	$	28,800	$	1,350	$	37,317
Percentage of total assets at fair value	19%		77%		4%		100%
Liabilities:
Derivatives - other liabilities	$	—	$	(53)	$	—	$	(53)
Total liabilities	$	—	$	(53)	$	—	$	(53)

December 31, 2025
Assets:
Cash equivalents	$	5,184	$	—	$	—	$	5,184
Fixed maturity securities, available-for-sale:
United States Government securities	—		1,503		—		1,503
Government sponsored securities	—		81		—		81
Foreign government securities	—		13		—		13
States, municipalities and political subdivisions, tax-exempt	—		3,701		—		3,701
Corporate securities	—		13,373		410		13,783
Residential mortgage-backed securities	—		3,090		17		3,107
Commercial mortgage-backed securities	—		2,073		—		2,073
Other asset-backed securities	—		1,878		866		2,744
Total fixed maturity securities, available-for-sale	—		25,712		1,293		27,005
Equity securities:
Exchange traded funds	650		—		—		650
Common equity securities	—		35		—		35
Private equity securities	—		—		55		55
Total equity securities	650		35		55		740
Other invested assets - common equity securities	6		—		—		6
Securities lending collateral	—		2,692		—		2,692
Derivatives - other assets	—		62		—		62
Total assets	$	5,840	$	28,501	$	1,348	$	35,689
Percentage of total assets at fair value	16%		80%		4%		100%
Liabilities:
Derivatives - other liabilities	$	—	$	(28)	$	—	$	(28)
Total liabilities	$	—	$	(28)	$	—	$	(28)

There were no individually material transfers into or out of Level III during the three months ended March 31, 2026 or 2025. There were no adjustments to quoted market prices obtained from the pricing services during the three months ended March 31, 2026 or 2025.

Certain assets and liabilities are measured at fair value on a nonrecurring basis; that is, the instruments are not measured at fair value on an ongoing basis but are subject to fair value adjustments only in certain circumstances. The fair values of goodwill and other intangible assets acquired in certain business acquisitions during the years ended December 31, 2025 and 2024 were finalized based on a valuation performed using the income approach. The income approach estimates fair value based on the present value of the cash flows that the assets could be expected to generate in the future. We developed internal estimates for the expected cash flows and discount rate in the present value calculation.

As discussed in more detail within Note 4, “Investments”, we entered into agreements that included certain put and call options associated with our minority interest ownership of Mosaic Health in 2024 and Liberty Dental in 2023 (as amended in 2025). The resulting net put option liabilities were recorded at their fair values measured at the dates of acquisition using Level III inputs with an election not to mark the derivative to market, which is further discussed and disclosed in Note 5, “Derivative Financial Instruments”. The net put option fair value for Mosaic Health was $2,699 and $2,717 at March 31, 2026 and December 31, 2025, respectively. The net put option fair value for Liberty Dental was $341 and $327 at March 31, 2026 and December 31, 2025, respectively.

Other than the goodwill and intangible assets acquired and liabilities assumed in our business acquisitions and the net put options on Mosaic Health and Liberty Dental, there were no material assets or liabilities measured at fair value on a nonrecurring basis during the three months ended March 31, 2026 or 2025.

In addition to the preceding disclosures on assets recorded at fair value in the consolidated balance sheets, FASB guidance also requires the disclosure of fair values for certain other financial instruments for which it is practicable to estimate fair value, whether or not such values are recognized in our consolidated balance sheets.

Non-financial instruments such as property and equipment, other current assets, deferred income taxes, intangible assets and certain financial instruments, such as limited partnerships, joint ventures, other non-controlled corporations, corporate-owned life insurance policies, and policy liabilities, are excluded from the fair value disclosures. Therefore, the fair value amounts cannot be aggregated to determine our underlying economic value.

The carrying amounts reported in the consolidated balance sheets for cash, premium receivables, self-funded receivables, other receivables, unearned income, accounts payable and accrued expenses, and certain other current liabilities approximate fair value because of the short-term nature of these items. These assets and liabilities are not listed in the table below.

See Note 7, “Fair Value,” to our audited consolidated financial statements as of and for the year ended December 31, 2025 included in Part II, Item 8 of our 2025 Annual Report on Form 10-K for details on the methods and assumptions used to estimate the fair value for each class of financial instruments that are recorded at their carrying value in our consolidated balance sheets.

A summary of the estimated fair values by level for each class of financial instruments that is recorded at its carrying value on our consolidated balance sheets at March 31, 2026 and December 31, 2025 is as follows:


	Carrying Value		Estimated Fair Value
			Level I		Level II		Level III		Total
March 31, 2026
Assets:
Other invested assets	$	787	$	—	$	—	$	765	$	765
Liabilities:
Debt:
Commercial paper	724		—		724		—		724
Notes	31,118		—		28,844		—		28,844
Options	1,726		—		—		3,040		3,040

December 31, 2025
Assets:
Other invested assets	$	781	$	—	$	—	$	762	$	762
Liabilities:
Debt:
Short-term borrowings	150		—		150		—		150

Notes	31,896		—		30,207		—		30,207
Options	1,726		—		—		3,044		3,044

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

+ References

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+ Details

Elevance Health, Inc. 10-Q