Company: NSP
Filing Date: 2025-08-01
Form Type: 10-Q
Source: 0001000753-25-000069
Chunk: 22

Company: INSPERITY, INC.
Filing Date: 2025-08-01
Form: 10-Q
Item: Item 8
Chunk 22
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 primarily to higher direct costs, offset in part by higher average pricing, 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 $49 due to higher average pricing of 3%.  

The net increase in direct costs between YTD 2025 and YTD 2024 attributable to the changes in cost estimates for benefits and workers’ compensation totaled $40 million as discussed below. The $90 per WSEE per month increase in direct costs is due primarily to the direct cost component changes as follows:

Benefits costs

•The cost of group health insurance and related employee benefits increased $60 per WSEE per month, or 9.0% on a cost per covered employee basis driven by continued elevated inpatient, outpatient, and pharmacy trends and frequency of large claim activity in YTD 2025 as compared to YTD 2024.

•The percentage of WSEEs covered under our health insurance plans was 63% in YTD 2025 compared to 64% in YTD 2024.

•Reported results include changes in estimated claims run-off related to prior periods, which was an increase in costs of $11 million, or $6 per WSEE per month, in YTD 2025 compared to a decrease in costs of $26 million, or $14 per WSEE per month, in YTD 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 8%, or $1 per WSEE per month, in YTD 2025 compared to YTD 2024.

•As a percentage of non-bonus payroll cost, workers’ compensation costs were 0.24% in YTD 2025 and 0.23% in YTD 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 $14 million, or 0.09% of non-bonus payroll costs, in YTD 2025 compared to a reduction of $17 million, or 0.11% of non-bonus payroll costs, in YTD 2024.

Please read Note 2 to