Company: NSP
Filing Date: 2025-04-29
Form Type: 10-Q
Source: 0001000753-25-000023
Chunk: 18

Company: INSPERITY, INC.
Filing Date: 2025-04-29
Form: 10-Q
Item: Item 8
Chunk 18
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, as discussed below.

Our pricing objectives attempt to achieve a level of revenue per WSEE that matches or exceeds changes in primary direct costs and operating expenses. Our revenues per WSEE per month increased $52 due to higher average pricing of 3%.

The net increase in direct costs between Q1 2025 and Q1 2024 attributable to the changes in cost estimates for benefits and workers’ compensation totaled $32 million as discussed below. The $92 per WSEE per month increase in direct costs is due primarily to the direct cost component changes as follows:

Insperity | 2025 First Quarter Form 10-Q26

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Benefits costs

•The cost of group health insurance and related employee benefits increased $56 per WSEE per month and increased 8.4% on a cost per covered employee basis driven by an acceleration in inpatient, outpatient, and pharmacy costs and in the frequency of large claim activity in Q1 2025 as compared to Q1 2024.

•The percentage of WSEEs covered under our health insurance plans was 64% in both Q1 2025 and Q1 2024.

•Reported results include changes in estimated claims run-off related to prior periods, which was an increase in costs of $12 million, or $13 per WSEE per month, in Q1 2025 compared to a decrease in costs of $18 million, or $20 per WSEE per month, in Q1 2024.

Please read Note 2 to the Consolidated Financial Statements, “Accounting Policies – Health Insurance Costs,” for a discussion of our accounting for health insurance costs.

Workers’ compensation costs

•Workers’ compensation costs increased 13%, or $2 per WSEE per month, in Q1 2025 compared to Q1 2024.

•As a percentage of non-bonus payroll cost, workers’ compensation costs were 0.24% in Q1 2025 compared to  0.22% in Q1 2024.

•Our continued discipline around our client selection, workplace safely and claims management has allowed for claims to be closed out at amounts below our original cost estimates, resulting in a reduction in workers’ compensation costs of $7 million, or 0.08% of non-bonus payroll costs in Q1 2025, compared to a reduction of $9 million, or 0.11% of non