Cigna Group

Note 3 – Accounts Receivable, Net

Accounting Policy. We bill pharmaceutical manufacturers based on management's interpretation of contractual terms and estimate a contractual allowance based on the best information available at the time a claim is processed. Contractual allowances for certain rebates receivable from pharmaceutical manufacturers are determined by reviewing payment experience and specific known items that could be adjusted under contract terms. The Company's estimation process for contractual allowances for pharmaceutical manufacturer receivables generally results in an allowance for balances outstanding greater than 90 days.

Contractual allowances for certain receivables from third-party payors are based on their contractual terms and are estimated based on the Company's best information available at the time revenue is recognized.

The allowance for expected credit losses for current accounts receivable is based primarily on past collections experience relative to the length of time receivables are past due; however, when available evidence reasonably supports an assumption that counterparty credit risk over the expected payment period will differ from current and historical payment collections, a forecasting adjustment is reflected in the allowance for expected credit losses.

Discounts and claims adjustments issued to customers in the form of client credits and other non-credit adjustments are based on the current status of each customer's receivable balance, current economic and market conditions and a variety of other factors, including the length of time the receivables are past due, the financial health of customers and our past experience.

Receivables and any associated allowance are written off only when all collection attempts have failed and such amounts are determined unrecoverable. We regularly review the adequacy of these allowances based on a variety of factors, including age of the outstanding receivable and collection history. When circumstances related to specific collection patterns change, estimates of the recoverability of receivables are adjusted.

The Company's accounts receivable include amounts due from clients, third-party payors, customers and pharmaceutical manufacturers, and are presented net of allowances. These balances include the following:

•Noninsurance customer receivables -amounts due from customers for noninsurance services, primarily pharmacy benefit management and ASO contracts.

•Pharmaceutical manufacturers receivables -amounts due from pharmaceutical manufacturers.

•Insurance customer receivables -amounts due from customers under insurance and managed care contracts, primarily premiums receivable and amounts due from CMS.

•Other receivables -all other accounts receivable not included in the categories above.

The following amounts were included within Accounts receivable, net:

These receivables are reported net of our allowances of $6.8 billion and $5.0 billion as of December 31, 2025 and 2024, respectively. As of December 31, 2025 and 2024, these allowances were primarily comprised of $6.2 billion and $4.3 billion, respectively, associated with contractual allowances for certain pharmaceutical manufacturers rebate receivables; $270 million and $388 million, respectively, associated with contractual allowances for third-party payor noninsurance customer receivables; and $199 million and $84 million, respectively, associated with allowances for current expected credit losses. The remaining allowances include discounts and claims adjustments issued to customers in the form of client credits and other non-credit adjustments.

Accounts Receivable Factoring Facility

The Company maintains an uncommitted factoring facility (the "Facility") with a total capacity of $1.5 billion under which certain accounts receivable may be sold on a non-recourse basis to a financial institution. The Facility automatically renewed in July 2025 and is subject toone-year renewal terms unless terminated by either party. The transactions under the Facility are accounted for as a sale and recorded as a reduction to accounts receivable in the Consolidated Balance Sheets because control of, and risk related to, the accounts receivable are transferred to the financial institution. Although the sale is made without recourse, we provide collection services related to the transferred assets. Amounts associated with this Facility are reflected within Net cash provided by operating activities in the Consolidated Statements of Cash Flows. Factoring fees paid under this Facility are reflected in Interest expense and other in the Consolidated Statements of Income.

We sold pharmaceutical manufacturers receivables under the Facility of $4.4 billion and $5.5 billion during the years ended December 31, 2025 and December 31, 2024, respectively. For the years ended December 31, 2025, 2024 and 2023, factoring fees paid were not material. As of December 31, 2025 and December 31, 2024, all sold accounts receivable had been collected from pharmaceutical manufacturers and had been removed from the Company's Consolidated Balance Sheets. As of December 31, 2025 and December 31, 2024, there were $0.4 billion and $1.0 billion, respectively, of collections from pharmaceutical manufacturers that had not been remitted to the financial institution. Such amounts are recorded within Accrued expenses and other liabilities in the Consolidated Balance Sheets.