Company: NSP
Filing Date: 2025-04-29
Form Type: 10-Q
Source: 0001000753-25-000023
Chunk: 6

Company: INSPERITY, INC.
Filing Date: 2025-04-29
Form: 10-Q
Item: Item 8
Chunk 6
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1.5 million, up to a maximum aggregate amount of $6 million per policy year for claims that exceed $1.5 million. Because we bear the financial responsibility for claims up to the levels noted above, such claims, which are the primary component of our workers’ compensation costs, are recorded in the period incurred. Workers’ compensation insurance includes ongoing health care and indemnity coverage whereby claims are paid over numerous years following the date of injury. Accordingly, the accrual of related incurred costs in each reporting period includes estimates, which take into account the ongoing development of claims and therefore requires a significant level of judgment. We utilize a third-party actuary to estimate our loss development rate, which is primarily based upon the nature of WSEEs’ job responsibilities, the location of WSEEs, the historical frequency and severity of workers’ compensation claims, and an estimate of future cost trends. Each reporting period, changes in the actuarial assumptions resulting from changes in actual claims experience and other trends are incorporated into our workers’ compensation claims cost estimates. During the three months ended March 31, 2025 and 2024, we reduced accrued workers’ compensation costs by $7 million and $9 million, respectively, for changes in estimated losses related to prior periods. Workers’ compensation cost estimates are discounted to present value at a rate based upon the U.S. Treasury rates that correspond with the weighted average estimated claim payout period (the average discount rate utilized was 4.0% in the 2025 period and 4.5% in the 2024 period) and are accreted over the estimated claim payment period and included as a component of direct costs in our Consolidated Statements of Income. 

Insperity | 2025 First Quarter Form 10-Q11

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The following table provides the activity and balances related to incurred but not paid workers’ compensation claims:Three Months Ended March 31,(in millions)20252024Beginning balance, January 1,$204 $220 Accrued claims, net16 14 Present value discount, net of accretion(3)(3)Paid claims(21)(16)Ending balance$196 $215 Current portion of accrued claims$74 $60 Long-term portion of accrued claims122 155 Total accrued claims$196 $215 The current portion of accrued workers’ compensation costs on our Condensed Consolidated Balance Sheets at March 31, 2025 and