10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C.  20549

FORM 10-Q

(Mark One)

ý Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended June 30, 2016.

or

o Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the transition period from  _______________ to _______________

Commission File No. 1-13998

Insperity, Inc.

(Exact name of registrant as specified in its charter)

Delaware	76-0479645
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
19001 Crescent Springs Drive
Kingwood, Texas	77339
(Address of principal executive offices)	(Zip Code)

(Registrant’s Telephone Number, Including Area Code):  (281) 358-8986

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days. Yes ý  No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes ý  No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.  See definition of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ý Accelerated filer o Non-accelerated filer o Smaller reporting company o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).   

Yes o No ý

As of July 25, 2016, 21,395,482 shares of the registrant’s common stock, par value $0.01 per share, were outstanding.

	TABLE OF CONTENTS
	Part I
Item 1.	Financial Statements	3
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	18
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	29
Item 4.	Controls and Procedures	30
Part II
Item 1.	Legal Proceedings	31
Item 1a.	Risk Factors	31
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	32
Item 6.	Exhibits	33

PART I

ITEM 1.  FINANCIAL STATEMENTS

INSPERITY, INC.

CONSOLIDATED BALANCE SHEETS

(in thousands)

ASSETS

	June 30, 2016			December 31, 2015
	(Unaudited)
Current assets:
Cash and cash equivalents	$	271,573		$	269,538
Restricted cash	41,226			37,418
Marketable securities	1,881			9,875
Accounts receivable, net:
Trade	3,977			7,691
Unbilled	236,422			190,715
Other	4,613			2,259
Prepaid insurance	26,545			7,417
Other current assets	18,554			17,135
Income taxes receivable	6,690			—
Total current assets	611,481			542,048
Property and equipment:
Land	5,214			5,214
Buildings and improvements	77,715			70,273
Computer hardware and software	93,458			90,654
Software development costs	48,634			45,762
Furniture, fixtures and other	40,195			39,919
	265,216			251,822
Accumulated depreciation and amortization	(197,545		)	(190,063		)
Total property and equipment, net	67,671			61,759
Other assets:
Prepaid health insurance	9,000			9,000
Deposits – health insurance	4,700			3,700
Deposits – workers’ compensation	130,731			136,462
Goodwill and other intangible assets, net	13,338			13,588
Deferred income taxes, net	7,562			16,976
Other assets	2,012			1,379
Total other assets	167,343			181,105
Total assets	$	846,495		$	784,912

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INSPERITY, INC.

CONSOLIDATED BALANCE SHEETS (Continued)

(in thousands)

LIABILITIES AND STOCKHOLDERS’ EQUITY

	June 30, 2016			December 31, 2015
	(Unaudited)
Current liabilities:
Accounts payable	$	3,546		$	5,381
Payroll taxes and other payroll deductions payable	141,213			205,393
Accrued worksite employee payroll cost	277,376			161,917
Accrued health insurance costs	26,920			13,643
Accrued workers’ compensation costs	43,294			39,053
Accrued corporate payroll and commissions	24,375			39,103
Other accrued liabilities	24,823			20,250
Income taxes payable	—			2,971
Total current liabilities	541,547			487,711
Noncurrent liabilities:
Accrued workers’ compensation costs	135,681			124,746
Long-term debt	104,400			—
Total noncurrent liabilities	240,081			124,746
Commitments and contingencies
Stockholders’ equity:
Common stock	277			308
Additional paid-in capital	4,428			144,701
Treasury stock, at cost	(205,018		)	(205,325		)
Retained earnings	265,180			232,771
Total stockholders’ equity	64,867			172,455
Total liabilities and stockholders’ equity	$	846,495		$	784,912

See accompanying notes.

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INSPERITY, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share amounts)

(Unaudited)

	Three Months Ended   June 30,						Six Months Ended   June 30,
	2016			2015			2016			2015
Revenues (gross billings of $4.163 billion, $3.703 billion, $8.727 billion and $7.643 billion less worksite employee payroll cost of $3.456 billion, $3.075 billion, $7.217 billion and $6.316 billion, respectively)	$	707,332		$	627,838		$	1,509,740		$	1,327,317
Direct costs:
Payroll taxes, benefits and workers’ compensation costs	594,073			523,619			1,246,465			1,093,238
Gross profit	113,259			104,219			263,275			234,079
Operating expenses:
Salaries, wages and payroll taxes	55,998			50,234			114,013			106,982
Stock-based compensation	4,761			4,041			8,336			6,464
Commissions	4,335			4,103			8,616			8,407
Advertising	6,712			6,883			9,759			10,064
General and administrative expenses	21,254			20,838			45,038			45,430
Impairment charges and other	—			1,313			—			11,120
Depreciation and amortization	4,176			4,590			8,447			9,875
	97,236			92,002			194,209			198,342
Operating income	16,023			12,217			69,066			35,737
Other income (expense):
Interest income	293			84			592			191
Interest expense	(650		)	(124		)	(1,287		)	(224		)
Income before income tax expense	15,666			12,177			68,371			35,704
Income tax expense	5,953			4,863			25,965			14,603
Net income	$	9,713		$	7,314		$	42,406		$	21,101
Less distributed and undistributed earnings allocated to participating securities	(229		)	(179		)	(962		)	(521		)
Net income allocated to common shares	$	9,484		$	7,135		$	41,444		$	20,580
Basic net income per share of common stock	$	0.45		$	0.29		$	1.98		$	0.83
Diluted net income per share of common stock	$	0.45		$	0.29		$	1.98		$	0.83

See accompanying notes.

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INSPERITY, INC.

CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY

SIX MONTHS ENDED JUNE 30, 2016

(in thousands)

(Unaudited)

	Common Stock Issued					Additional Paid-In Capital			Treasury Stock			Retained Earnings			Total
	Shares		Amount
Balance at December 31, 2015	30,758		$	308		$	144,701		$	(205,325	)	$	232,771		$	172,455
Purchase of treasury stock, at cost	—		—			—			(4,790		)	—			(4,790		)
Repurchase of common stock	(3,014	)	(31		)	(144,232		)	—			—			(144,263		)
Stock-based compensation expense	—		—			3,689			4,647			—			8,336
Other	—		—			270			450			—			720
Dividends paid	—		—			—			—			(9,997		)	(9,997		)
Net income	—		—			—			—			42,406			42,406
Balance at June 30, 2016	27,744		$	277		$	4,428		$	(205,018	)	$	265,180		$	64,867

See accompanying notes.

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INSPERITY, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

(Unaudited)

	Six Months Ended   June 30,
	2016			2015
Cash flows from operating activities:
Net income	$	42,406		$	21,101
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Depreciation and amortization	8,447			9,875
Impairment charges and other	—			11,120
Amortization of marketable securities	52			629
Stock-based compensation	8,336			6,464
Deferred income taxes	9,414			(5,250		)
Changes in operating assets and liabilities:
Restricted cash	(3,808		)	(4,847		)
Accounts receivable	(44,347		)	(90,515		)
Prepaid insurance	(19,128		)	4,842
Other current assets	(1,419		)	2,127
Other assets	4,104			3,136
Accounts payable	(1,835		)	(2,291		)
Payroll taxes and other payroll deductions payable	(64,180		)	(53,466		)
Accrued worksite employee payroll expense	115,459			35,695
Accrued health insurance costs	13,277			(12,045		)
Accrued workers’ compensation costs	15,176			12,139
Accrued corporate payroll, commissions and other accrued liabilities	(11,627		)	(7,349		)
Income taxes payable/receivable	(9,661		)	(2,844		)
Total adjustments	18,260			(92,580		)
Net cash provided by (used in) operating activities	60,666			(71,479		)
Cash flows from investing activities:
Marketable securities:
Purchases	(310		)	(5,379		)
Proceeds from dispositions	7,268			6,877
Proceeds from maturities	990			4,851
Property and equipment:
Purchases	(12,647		)	(5,850		)
Net cash provided by (used in) investing activities	(4,699		)	499

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INSPERITY, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)

(in thousands)

(Unaudited)

	Six Months Ended   June 30,
	2016			2015
Cash flows from financing activities:
Purchase of treasury stock	$	(4,790	)	$	(31,370	)
Repurchase of common stock	(144,263		)	—
Dividends paid	(9,997		)	(10,407		)
Proceeds from the exercise of stock options	—			374
Income tax benefit from stock-based compensation	—			2,972
Borrowings under long-term debt agreement	124,400			—
Principal repayments	(20,000		)	—
Other	718			683
Net cash used in financing activities	(53,932		)	(37,748		)
Net increase (decrease) in cash and cash equivalents	2,035			(108,728		)
Cash and cash equivalents at beginning of period	269,538			276,456
Cash and cash equivalents at end of period	$	271,573		$	167,728

See accompanying notes.

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INSPERITY, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2016

(Unaudited)

1. Basis of Presentation

Insperity, Inc., a Delaware corporation (“Insperity,” “we,” “our,” and “us”), provides an array of human resources (“HR”) and business solutions designed to help improve business performance. Our most comprehensive HR services offerings are provided through our professional employer organization (“PEO”) services, known as Workforce Optimization^® and Workforce Synchronization^TM solutions (together, our “PEO HR Outsourcing solutions”), which encompass a broad range of HR functions, including payroll and employment administration, employee benefits, workers’ compensation, government compliance, performance management, and training and development services, along with our cloud-based human capital management platform, the Employee Service Center^SM.

In addition to our PEO HR Outsourcing solutions, we offer a number of other business performance solutions, including Human Capital Management, Payroll Software, Time and Attendance, Performance Management, Organizational Planning, Recruiting Services, Employment Screening, Financial and Expense Management services, Retirement Services and Insurance Services, many of which are offered via desktop applications and cloud-based delivery models. These other products and services are offered separately, as a bundle, or along with our PEO HR Outsourcing solutions.

The Consolidated Financial Statements include the accounts of Insperity and its wholly owned subsidiaries. Intercompany accounts and transactions have been eliminated in consolidation.

The preparation of financial statements in conformity with accounting principles generally accepted in the United States (“GAAP”) requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes.  Actual results could differ from those estimates.

The accompanying Consolidated Financial Statements should be read in conjunction with our audited Consolidated Financial Statements at and for the year ended December 31, 2015. Our Consolidated Balance Sheet at December 31, 2015 has been derived from the audited financial statements at that date, but does not include all of the information or footnotes required by GAAP for complete financial statements.  Our Consolidated Balance Sheet at June 30, 2016 and our Consolidated Statements of Operations for the three and six month periods ended June 30, 2016 and 2015, our Consolidated Statements of Cash Flows for the six month periods ended June 30, 2016 and 2015, and our Consolidated Statement of Stockholders’ Equity for the six month period ended June 30, 2016, have been prepared by us without audit. In the opinion of management, all adjustments, consisting only of normal recurring adjustments necessary to present fairly the consolidated financial position, results of operations and cash flows, have been made. Certain prior year amounts have been reclassified to conform to the 2016 presentation.

The results of operations for the interim periods are not necessarily indicative of the operating results for a full year or of future operations.

2. Accounting Policies

Health Insurance Costs

We provide group health insurance coverage to our worksite employees through a national network of carriers, including UnitedHealthcare (“United”), UnitedHealthcare of California, Kaiser Permanente, Blue Shield of California, HMSA BlueCross BlueShield, and Tufts, all of which provide fully insured policies or service contracts.

The policy with United provides the majority of our health insurance coverage. As a result of certain contractual terms, we have accounted for this plan since its inception using a partially self-funded insurance accounting model. Accordingly, we record the costs of the United plan, including an estimate of the incurred claims, taxes and administrative fees (collectively the “Plan Costs”) as benefits expense in our Consolidated Statements of Operations. The estimated incurred claims are based upon: (i) the level of claims processed during the quarter; (ii) estimated completion rates based upon recent claim development patterns under the plan; and (iii) the number of participants in the plan, including both active and COBRA

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enrollees. Each reporting period, changes in the estimated ultimate costs resulting from claim trends, plan design and migration, participant demographics and other factors are incorporated into the benefits costs.

Additionally, since the plan’s inception, under the terms of the contract, United establishes cash funding rates 90 days in advance of the beginning of a reporting quarter. If the Plan Costs for a reporting quarter are greater than the premiums paid and owed to United, a deficit in the plan would be incurred and a liability for the excess costs would be accrued in our Consolidated Balance Sheets. On the other hand, if the Plan Costs for the reporting quarter are less than the premiums paid and owed to United, a surplus in the plan would be incurred and we would record an asset for the excess premiums in our Consolidated Balance Sheets. The terms of the arrangement require us to maintain an accumulated cash surplus in the plan of $9.0 million, which is reported as long-term prepaid insurance. In addition, United requires a deposit equal to approximately one day of claims funding activity, which was $4.5 million as of June 30, 2016, and is reported as a long-term asset. As of June 30, 2016, Plan Costs were less than the net premiums paid and owed to United by $22.9 million. As this amount is in excess of the agreed-upon $9.0 million surplus maintenance level, the $13.9 million difference is included in prepaid insurance, a current asset, in our Consolidated Balance Sheets. The premiums owed to United at June 30, 2016 were $23.0 million, which is included in accrued health insurance costs, a current liability in our Consolidated Balance Sheets. Our benefits costs incurred in the first six months of 2016 included costs of $3.7 million for changes in estimated run-off related to prior periods.

Workers’ Compensation Costs

Our workers’ compensation coverage has been provided through an arrangement with the Chubb Group of Insurance Companies (the “Chubb Program”) since 2007. The Chubb Program is fully insured in that Chubb has the responsibility to pay all claims incurred regardless of whether we satisfy our responsibilities. Under the Chubb Program, we bear the economic burden for the first $1 million layer of claims per occurrence, as well as a maximum aggregate amount of $5 million per policy year for claim amounts that exceed $1 million. Chubb bears the economic burden for all claims in excess of these levels.

Because we bear the economic burden 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 employ a third party actuary to estimate our loss development rate, which is primarily based upon the nature of worksite employees’ job responsibilities, the location of worksite employees, 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. 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 in both the 2016 period and the 2015 period was 1.0%) and are accreted over the estimated claim payment period and included as a component of direct costs in our Consolidated Statements of Operations.

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The following table provides the activity and balances related to incurred but not paid workers’ compensation claims:

	Six Months Ended   June 30,
	2016			2015
	(in thousands)
Beginning balance, January 1,	$	162,184		$	136,088
Accrued claims	35,045			32,720
Present value discount	(1,274		)	(1,189		)
Paid claims	(19,038		)	(19,794		)
Ending balance	$	176,917		$	147,825
Current portion of accrued claims	$	41,236		$	48,887
Long-term portion of accrued claims	135,681			98,938
	$	176,917		$	147,825

The current portion of accrued workers’ compensation costs on our Consolidated Balance Sheets at June 30, 2016 includes $2.1 million of workers’ compensation administrative fees.

As of June 30, 2016 and 2015, the undiscounted accrued workers’ compensation costs were $187.0 million and $157.4 million, respectively.

At the beginning of each policy period, the workers’ compensation insurance carrier establishes monthly funding requirements comprised of premium costs and funds to be set aside for payment of future claims (“claim funds”). The level of claim funds is primarily based upon anticipated worksite employee payroll levels and expected workers’ compensation loss rates, as determined by the insurance carrier. Monies funded into the program for incurred claims expected to be paid within one year are recorded as restricted cash, a short-term asset, while the remainder of claim funds are included in deposits - workers’ compensation, a long-term asset in our Consolidated Balance Sheets. During the first six months of 2016, we

received $12.8 million for the return of excess claim funds related to the workers’ compensation program. This resulted in a net

decrease to deposits. As of June 30, 2016, we had restricted cash of $41.2 million and deposits - workers’ compensation of $130.7 million.

Our estimate of incurred claim costs expected to be paid within one year is included in short-term liabilities, while our estimate of incurred claim costs expected to be paid beyond one year is included in long-term liabilities on our Consolidated Balance Sheets.

New Accounting Pronouncements

We believe we have implemented the accounting pronouncements with a material impact on our financial statements and do not believe there are any new or pending pronouncements that will materially impact our financial position or results of operations, other than discussed below.

In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers (Topic 606). ASU No. 2014-09 outlines a single comprehensive revenue recognition model for revenue arising from contracts with customers and supersedes most current revenue recognition guidance, including industry-specific guidance. Under ASU No. 2014-09, an entity recognizes revenue for the transfer of promised goods or services to customers in an amount that reflects the consideration for which the entity expects to be entitled in exchange for those goods or services. ASU No. 2014-09 is effective for annual reporting periods ending after December 15, 2017, and early adoption is not permitted. Companies may use either a full retrospective or a modified retrospective approach to adopt ASU No. 2014-09. We are currently evaluating the guidance and have not determined the impact this standard may have on our Consolidated Financial Statements.

In April 2015, FASB issued ASU No. 2015-05, Intangibles—Goodwill and Other—Internal-Use Software providing guidance on the accounting for fees paid by a customer in a cloud computing arrangement, including whether a cloud

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computing arrangement includes a software license. If a cloud computing arrangement includes a software license, then the customer is required to account for the software license consistent with the acquisition of other software licenses. Conversely, if the arrangement does not include a software license, the customer should account for the arrangement as a service contract. The guidance is effective for fiscal years beginning after December 15, 2015. The adoption of this guidance did not have a material impact on our consolidated financial statements.

In February 2016, the FASB issued ASU No. 2016-02, Leases. The new standard requires recognition of lease assets and lease liabilities for leases previously classified as operating leases. The guidance is effective for fiscal years beginning after December 15, 2018. We are currently reviewing the guidance and assessing the impact on our consolidated financial statements.

In March 2016, the FASB issued ASU No. 2016-09, Compensation-Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting. The ASU includes multiple provisions intended to simplify various aspects of the accounting for share-based compensation payments, including (i) permitting the election of estimated or actual forfeitures for share grants, (ii) allowing excess tax benefits for share-based payments to be recorded as a reduction of income taxes reflected in operating cash flows in place of excess tax benefits currently recorded in equity and as financing activity in the cash flow statement, and (iii) providing for statutory withholding requirements. This guidance is effective for annual and interim reporting periods for public entities beginning after December 15, 2016; however, it can be elected early in any interim or annual period. We have elected to prospectively adopt this pronouncement for calendar year 2016, resulting in the recognition of an income tax benefit of $1.0 million, or $0.05 per diluted share in the first quarter of 2016 related to excess tax benefits from vesting of restricted stock awards. Prior to the adoption of this pronouncement excess tax benefits were required to be reported as an increase in additional paid in capital. Prior periods have not been adjusted.

3. Cash, Cash Equivalents and Marketable Securities

The following table summarizes our cash and investments in cash equivalents and marketable securities held by investment managers and overnight investments:

	June 30, 2016			December 31, 2015
	(in thousands)
Overnight Holdings
Money market funds (cash equivalents)	$	233,080		$	247,720
Investment Holdings
Money market funds (cash equivalents)	24,010			26,048
Marketable securities	1,881			9,875
	258,971			283,643
Cash held in demand accounts	24,666			19,377
Outstanding checks	(10,183		)	(23,607		)
Total cash, cash equivalents and marketable securities	$	273,454		$	279,413
Cash and cash equivalents	$	271,573		$	269,538
Marketable securities	1,881			9,875
Total cash, cash equivalents and marketable securities	$	273,454		$	279,413

Our cash and overnight holdings fluctuate based on the timing of clients’ payroll processing cycles. Included in the cash, cash equivalents and marketable securities at June 30, 2016 and December 31, 2015, are $121.4 million and $185.7 million, respectively, of funds associated with federal and state income tax withholdings, employment taxes and other payroll deductions, as well as $100.7 million and $17.0 million in client prepayments, respectively.

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We account for our financial assets in accordance with Accounting Standard Codification 820, Fair Value Measurement. This standard defines fair value, establishes a framework for measuring fair value and expands disclosures about fair value measurements. The fair value measurement disclosures are grouped into three levels based on valuation factors:

• Level 1 - quoted prices in active markets using identical assets

• Level 2 - significant other observable inputs, such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active, or other observable inputs

• Level 3 - significant unobservable inputs

The following table summarizes the levels of fair value measurements of our financial assets:

	Fair Value Measurements
	(in thousands)
	June 30, 2016		Level 1		Level 2		Level 3
Money market funds	$	257,090	$	257,090	$	—	$	—
Municipal bonds	1,881		—		1,881		—
Total	$	258,971	$	257,090	$	1,881	$	—

	Fair Value Measurements
	(in thousands)
	December 31, 2015		Level 1		Level 2		Level 3
Money market funds	$	273,768	$	273,768	$	—	$	—
Municipal bonds	9,875		—		9,875		—
Total	$	283,643	$	273,768	$	9,875	$	—

The municipal bond securities valued as Level 2 investments are primarily pre-refunded municipal bonds that are secured by escrow funds containing U.S. Government securities. Our valuation techniques used to measure fair value for these securities during the period consisted primarily of third party pricing services that utilized actual market data such as trades of comparable bond issues, broker/dealer quotations for the same or similar investments in active markets and other observable inputs.

The following is a summary of our available-for-sale marketable securities:

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Estimated Fair Value
			(in thousands)
June 30, 2016
Municipal bonds	$	1,879	$	2	$	—		$	1,881
December 31, 2015
Municipal bonds	$	9,875	$	3	$	(3	)	$	9,875

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As of June 30, 2016, the contractual maturities of our marketable securities were as follows:

	Amortized Cost		Estimated Fair Value
	(in thousands)
Less than one year	$	1,351	$	1,351
One to five years	528		530
Total	$	1,879	$	1,881

4. Impairment Charges and Other

In the first quarter of 2015, we entered into a plan to sell our two aircraft, and as a result, we recorded impairment and other charges of $9.8 million, representing the difference between the carrying value and the estimated fair value of the assets as well as a provision for potential settlement of a Texas sales and use tax assessment. The fair value of assets held for sale of $13.5 million was determined based on the estimated selling price less costs incurred to sell and was classified as Level 2 in the fair value hierarchy. In July 2015, we received proceeds, net of selling costs, of $12.2 million for both aircraft and recorded an additional $1.3 million impairment charge in the second quarter of 2015.

5. Long-Term Debt

We have a revolving credit facility (the “Facility”), which was increased from $125 million to $200 million in the first quarter of 2016. The Facility may be further increased to $250 million based on the terms and subject to the conditions set forth in the agreement relating to the Facility (the “Credit Agreement”). The Facility is available for working capital and general corporate purposes, including acquisitions, stock repurchases and issuances of letters of credit. Our obligations under the Facility are secured by 65% of the stock of our captive insurance subsidiary and are guaranteed by all of our domestic subsidiaries. In January 2016, we had net borrowings of $104.4 million to fund a portion of the purchase price of our modified Dutch auction tender offer. In addition, as of June 30, 2016, we had an outstanding $1.0 million letter of credit issued under the Facility. As of June 30, 2016, our outstanding balance on the Facility was $104.4 million.

The Facility matures on February 6, 2020. Borrowings under the Facility bear interest at an alternate base rate or LIBOR, at our option, plus an applicable margin. Depending on our leverage ratio, the applicable margin varies (i) in the case of LIBOR loans, from 2.00% to 2.75% and (ii) in the case of alternate base rate loans, from 0.00% to 0.75%. The alternate base rate is the highest of (i) the prime rate most recently published in The Wall Street Journal, (ii) the federal funds rate plus 0.50% and (iii) the 30-day LIBOR rate plus 2.00%. We also pay an unused commitment fee on the average daily unused portion of the Facility at a rate of 0.25%. The interest rate at June 30, 2016 was 2.19%. Interest expense and unused commitment fees are recorded in other income (expense).

The Facility contains both affirmative and negative covenants that we believe are customary for arrangements of this nature. Covenants include, but are not limited to, limitations on our ability to incur additional indebtedness, sell material assets, retire, redeem or otherwise reacquire our capital stock, acquire the capital stock or assets of another business, make investments and pay dividends. In addition, the Credit Agreement requires us to comply with financial covenants limiting our total funded debt, minimum interest coverage ratio and maximum leverage ratio. We were in compliance with all financial covenants under the Credit Agreement at June 30, 2016.

6. Stockholders' Equity

During the first six months of 2016, we repurchased or withheld an aggregate of 3.1 million shares of our common stock, as described below.

Tender Offer for Common Stock

In December 2015, we commenced a modified Dutch auction tender offer to purchase up to $125 million in value of our common stock at a price not less than $43.50 per share and not more than $50.00 per share. In January 2016, we exercised our right to increase the size of the tender offer by up to 2.0% of our outstanding common stock. The tender offer period expired on January 7, 2016 and on January 13, 2016, we purchased 3,013,531 shares of our common stock at a per share price of $47.50 and an aggregate price of $143.1 million, excluding $1.1 million of transaction costs. The shares were immediately canceled and retired.

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The tender offer was funded through borrowings of $104.4 million under the Facility and the remainder with cash on hand.

Repurchase Program

Our Board of Directors (the “Board”) has authorized a program to repurchase shares of our outstanding common stock (“Repurchase Program”). The purchases are to be made from time to time in the open market or directly from stockholders at prevailing market prices based on market conditions and other factors. In May 2016, the Board increased the authorized number of shares to be repurchased under the Repurchase Program by one million. During the six months ended June 30, 2016, no shares were repurchased under the Repurchase Program. As of June 30, 2016, we were authorized to repurchase an additional 1,524,332 shares under the Repurchase Program.

Withheld Shares

During the six months ended, June 30, 2016, we withheld 100,595 shares to satisfy tax withholding obligations for the vesting of restricted stock awards.

Dividends

The Board declared quarterly dividends as follows:

	2016		2015
	(amounts per share)
First quarter	$	0.22	$	0.19
Second quarter	0.25		0.22

 During the six months ended June 30, 2016 and 2015, we paid dividends totaling $10.0 million and $10.4 million, respectively.

7. Long-Term Incentive Program

On March 30, 2015, we adopted the Insperity, Inc. Long-Term Incentive Program (the “LTIP”) under the Insperity, Inc. 2012 Incentive Plan. The LTIP provides for performance-based long-term compensation awards in the form of performance units to certain employees based on the achievement of pre-established performance goals.

Each performance unit represents the right to receive one common share at a future date based on our performance against specified targets. Performance units have a vesting schedule of three years. The fair value of each performance unit is the market price of one common share on the date of grant in the case of performance condition awards. In the case of market condition awards, the fair value is determined using a Monte Carlo lattice model approach at the date of grant. The compensation expense for such awards is recognized on a straight-line basis over the vesting term. For performance condition awards, the number of shares expected to be issued is adjusted upward or downward based upon the probability of achievement of the performance targets.

The ultimate number of shares issued and the related compensation cost recognized is based on a comparison of the final performance metrics to the specified targets.

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The following is a summary of LTIP award activity for 2016:

	Number of Performance Units at Target		Weighted Average Grant Date Fair Value		Maximum Shares Eligible to Receive
Unvested - December 31, 2015	100,900		$	52.80	183,401
Granted	118,525		59.13		237,050
Vested	—		—		—
Canceled	(2,550	)	52.80		(4,635	)
Unvested - June 30, 2016	216,875		56.26		415,816

As of June 30, 2016, we estimate 178,770 shares and 127,429 shares will vest with $5.4 million and $6.0 million in unamortized compensation expense related to the 2015 and 2016 grants, respectively.

8. Net Income per Share

We utilize the two-class method to compute net income per share. The two-class method allocates a portion of net income to participating securities, which include unvested awards of share-based payments with non-forfeitable rights to receive dividends. Net income allocated to unvested share-based payments is excluded from net income allocated to common shares. Any undistributed losses resulting from dividends exceeding net income are not allocated to participating securities. Basic net income per share is computed by dividing net income allocated to common shares by the weighted average number of common shares outstanding during the period. Diluted net income per share is computed by dividing net income allocated to common shares by the weighted average number of common shares outstanding during the period, plus the dilutive effect of outstanding stock options.

The following table summarizes the net income allocated to common shares and the basic and diluted shares used in the net income per share computations:

	Three Months Ended   June 30,						Six Months Ended   June 30,
	2016			2015			2016			2015
	(in thousands)
Net income	$	9,713		$	7,314		$	42,406		$	21,101
Less distributed and undistributed earnings allocated to participating securities	(229		)	(179		)	(962		)	(521		)
Net income allocated to common shares	$	9,484		$	7,135		$	41,444		$	20,580
Weighted average common shares outstanding	20,869			24,766			20,921			24,741
Incremental shares from assumed conversions of common stock options	15			7			10			8
Adjusted weighted average common shares outstanding	20,884			24,773			20,931			24,749

9. Commitments and Contingencies

Worksite Employee 401(k) Retirement Plan Class Action Litigation

In December 2015, a class action lawsuit was filed against us and our third party discretionary trustee of the Insperity 401(k) retirement plan available to eligible worksite employees (the “Plan”) in the United States District Court for the Northern District of Georgia, Atlanta Division on behalf of Plan participants. This suit generally alleges that the Company’s third-party discretionary trustee of the Plan and Insperity breached their fiduciary duties to plan participants by selecting an Insperity subsidiary to serve as the recordkeeper for the Plan, by causing participants in the Plan to pay excessive recordkeeping fees to the Insperity subsidiary, by failing to monitor other fiduciaries and by making imprudent investment choices. We believe we

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have meritorious defenses and we intend to vigorously defend this litigation. As a result of uncertainty regarding the outcome of this matter, no provision has been made in the accompanying consolidated financial statements.

We are a defendant in various other lawsuits and claims arising in the normal course of business. Management believes it has valid defenses in these cases and is defending them vigorously. While the results of litigation cannot be predicted with certainty, management believes the final outcome of such litigation will not have a material adverse effect on our financial position or results of operations.

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ITEM 2.  MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

You should read the following discussion in conjunction with our Annual Report on Form 10-K for the year ended December 31, 2015, as well as our Consolidated Financial Statements and notes thereto included in this quarterly report on Form 10-Q.

New Accounting Pronouncements

Please read Note 2 to the Consolidated Financial Statements, "Accounting Policies – New Accounting Pronouncements," for new accounting pronouncements information.

Results of Operations

Three Months Ended June 30, 2016 Compared to Three Months Ended June 30, 2015.

The following table presents certain information related to our results of operations:

	Three Months Ended   June 30,
	2016			2015				% Change
	(in thousands, except per share and statistical data)
Revenues (gross billings of $4.163 billion and $3.703 billion, less worksite employee payroll cost of $3.456 billion and $2.716 billion, respectively)	$	707,332		$	627,838			12.7	%
Gross profit	113,259			104,219				8.7	%
Operating expenses	97,236			92,002			(1)	5.7	%
Operating income	16,023			12,217				31.2	%
Other expense	(357		)	(40		)		—
Net income	9,713			7,314				32.8	%
Diluted net income per share of common stock	0.45			0.29				55.2	%
Adjusted net income(2)	12,864			10,771				19.4	%
Adjusted diluted net income per share of common stock(2)	0.60			0.42				42.9	%
Adjusted EBITDA(2)	25,576			22,643				13.0	%
Statistical Data:
Average number of worksite employees paid per month	163,521			143,131				14.2	%
Revenues per worksite employee per month(3)	$	1,442		$	1,462			(1.4	)%
Gross profit per worksite employee per month	231			243				(4.9	)%
Operating expenses per worksite employee per month	198			215				(7.9	)%
Operating income per worksite employee per month	33			28				17.9	%
Net income per worksite employee per month	20			17				17.6	%

 ____________________________________

⁽¹⁾  Includes non-cash impairment and other charges of $1.3 million, or an after-tax effect of $0.03 per share in the 2015 period. Please read Note 4 to the Consolidated Financial Statements, “Impairment Charges and Other,” for additional information.

⁽²⁾  Please read “Non-GAAP Financial Measures” for a reconciliation of the non-GAAP financial measures to their most directly comparable financial measures calculated and presented in accordance with GAAP.

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⁽³⁾  Gross billings of $8,485 and $8,623 per worksite employee per month, less payroll cost of $7,043 and $7,161 per worksite employee per month, respectively.

Revenues

Our revenues for the second quarter of 2016increased12.7% over the 2015 period, primarily due to a 14.2%increase in the average number of worksite employees paid per month, partially offset by a 1.4%, or $20, decrease in revenues per worksite employee per month.

We provide our PEO HR Outsourcing solutions to small and medium-sized businesses in strategically selected markets throughout the United States. Our revenue by region for our PEO HR Outsourcing solutions for the quarters ended June 30, 2016 and 2015 were as follows:

	Three Months Ended   June 30,						Three Months Ended   June 30,
	2016		2015		% Change		2016		2015
	(in thousands)						(% of total revenue)
Northeast	$	179,505	$	159,834	12.3	%	25.8	%	26.0	%
Southeast	76,270		62,984		21.1	%	11.0	%	10.2	%
Central	111,502		94,212		18.4	%	16.0	%	15.3	%
Southwest	166,523		157,586		5.7	%	24.0	%	25.6	%
West	160,932		141,302		13.9	%	23.2	%	22.9	%
	694,732		615,918		12.8	%	100.0	%	100.0	%
Other revenue(1)	12,600		11,920		5.7	%
Total revenue	$	707,332	$	627,838	12.7	%

_____________________________

⁽¹⁾ Comprised primarily of revenues generated by our other products and services offerings.

The percentage of total PEO HR Outsourcing solutions revenues in our significant markets include the following:

	Three Months Ended June 30,
	2016		2015
Texas	22.4	%	23.8	%
California	18.3	%	18.1	%
New York	9.3	%	9.4	%
Other	50.0	%	48.7	%
Total	100.0	%	100.0	%

Our growth in the number of worksite employees paid is affected by three primary sources: new client sales, client retention and the net change in existing clients through worksite employee new hires and layoffs. During the second quarter of 2016, we saw improvement in worksite employees paid from new client sales, while client retention and the net change in existing clients were consistent with 2015.

Gross Profit

Gross profit for the second quarter of 2016increased8.7% over the second quarter of 2015 to $113.3 million. The average gross profit per worksite employee decreased4.9% to $231 per month in the 2016 period from $243 per month in the 2015 period. Included in gross profit in the 2016 period is a $17 per worksite employee per month contribution from our other products and services offerings compared to $18 per worksite employee per month in the 2015 period.

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Our pricing objectives attempt to achieve a level of revenue per worksite employee to match or exceed changes in primary direct costs and operating expenses. Our revenues per worksite employee per month during the second quarter of 2016decreased1.4% compared to the second quarter of 2015. Our direct costs, which primarily include payroll taxes, benefits and workers’ compensation expenses, decreased0.7% to $1,211 per worksite employee per month in the second quarter of 2016 compared to $1,219 in the second quarter of 2015. The primary direct cost components changed as follows:

• Benefits costs – The cost of group health insurance and related employee benefits decreased$2 per worksite employee per month, but increased1.9% on a cost per covered employee basis, compared to the second quarter of 2015. Included in 2016 benefits costs is a charge of $1.7 million, or $3 per worksite employee per month, for changes in estimated claims run-off related to prior periods. The percentage of worksite employees covered under our health insurance plans was 69.0% in the 2016 period compared to 70.5% in the 2015 period. 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 increased8.1% in part due to a 15.1%increase in the average non-bonus payroll, but decreased$2 on a per worksite employee per month basis, compared to the second quarter of 2015. In the second quarter of 2016, we recorded reductions in workers’ compensation costs of $1.8 million, or 0.05% of non-bonus payroll costs, for changes in estimated losses related to prior reporting periods. As a percentage of non-bonus payroll cost, workers’ compensation costs were 0.64% in the 2016 period compared to 0.68% in the 2015 period. Please read Note 2 to the Consolidated Financial Statements, “Accounting Policies – Workers’ Compensation Costs,” for a discussion of our accounting for workers’ compensation costs.

• Payroll tax costs – Payroll taxes increased 13.8% in part due to a 12.4%increase in payroll costs, but decreased $2 on a per worksite employee per month basis, compared to the second quarter of 2015. Payroll taxes as a percentage of payroll costs were 7.1% in 2016 and 7.0% in 2015.

Operating Expenses

The following table presents certain information related to our operating expenses:

	Three Months Ended   June 30,						Three Months Ended   June 30,
	2016		2015		% Change		2016		2015		% Change
	(in thousands)						(per worksite employee per month)
Salaries, wages and payroll taxes	$	55,998	$	50,234	11.5	%	$	114	$	117	(2.6	)%
Stock-based compensation	4,761		4,041		17.8	%	10		9		11.1	%
Commissions	4,335		4,103		5.7	%	9		10		(10.0	)%
Advertising	6,712		6,883		(2.5	)%	14		17		(17.6	)%
General and administrative expenses	21,254		20,838		2.0	%	42		48		(12.5	)%
Impairment charges and other	—		1,313		—		—		3		—
Depreciation and amortization	4,176		4,590		(9.0	)%	9		11		(18.2	)%
Total operating expenses	$	97,236	$	92,002	5.7	%	$	198	$	215	(7.9	)%

Operating expenses increased5.7% to $97.2 million compared to $92.0 million in the second quarter of 2015. Operating expenses per worksite employee per month decreased to $198 in the 2016 period from $215 in the 2015 period. We recorded impairment and other charges of $1.3 million during the second quarter of 2015. Please read Note 4 to the Consolidated Financial Statements, “Impairment Charges and Other,” for additional information. Adjusted operating expenses increased7.3% to $96.9 million in the 2016 period from $90.3 million in the 2015 period. Please read “—Non-GAAP Financial Measures” for additional information. The components of operating expenses changed as follows:

• Salaries, wages and payroll taxes of corporate and sales staff increased11.5%, but decreased$3 on a per worksite employee per month basis, compared to the 2015 period. This increase was primarily due to a 5.3%increase in corporate headcount, including a 9.6% increase in the number of Business Performance Advisors.

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• Stock-based compensation increased17.8%, or $1 per worksite employee per month, compared to the 2015 period. This increase was primarily due to awards issued under the Insperity, Inc. Long-Term Incentive Program (the “LTIP”). Please read Note 7 to the Consolidated Financial Statements, “Long-Term Incentive Program,” for additional information.

• Commissions expense increased5.7%, but decreased$1 on a per worksite employee per month basis, compared to the 2015 period, primarily due to commissions associated with our PEO HR Outsourcing solutions.

• Advertising costs decreased2.5%, or $3 per worksite employee per month, compared to the 2015 period.

• General and administrative expenses, which includes $0.3 million in stockholder advisory expenses in the 2016 period, increased2.0%, but decreased$6 on a per worksite employee per month basis, compared to the 2015 period. The increase was primarily due to increased travel and training expenses, offset in part by decreased professional fees and the elimination of repair and maintenance costs associated with the two aircraft sold in July 2015. Please read Note 4 to the Consolidated Financial Statements, “Impairment Charges and Other,” for additional information.

• Depreciation and amortization expense decreased9.0%, or $2 per worksite employee per month, compared to the 2015 period, primarily due to certain acquired assets becoming fully depreciated in 2015.

Income Tax Expense

Our effective income tax rate was 38.0% in the 2016 period compared to 39.9% in the 2015 period. Our provision for income taxes differed from the U.S. statutory rate of 35% primarily due to state income taxes and non-deductible expenses.

Operating and Net Income

Operating and net income per worksite employee per month was $33 and $20 in the 2016 period, versus $28 and $17 in the 2015 period.

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Six Months Ended June 30, 2016 Compared to Six Months Ended June 30, 2015.

The following table presents certain information related to our results of operations:

	Six Months Ended   June 30,
	2016			2015				% Change
	(in thousands, except per share and statistical data)
Revenues (gross billings of $8.727 billion and $7.643 billion, less worksite employee payroll cost of $7.217 billion and $6.316 billion, respectively)	$	1,509,740		$	1,327,317			13.7	%
Gross profit	263,275			234,079				12.5	%
Operating expenses	194,209			198,342			(1)	(2.1	)%
Operating income	69,066			35,737				93.3	%
Other expense	(695		)	(33		)		—
Net income	42,406			21,101				101.0	%
Diluted net income per share of common stock	1.98			0.83				138.6	%
Adjusted net income(2)	47,775			32,407				47.4	%
Adjusted diluted net income per share of common stock(2)	2.23			1.28				74.2	%
Adjusted EBITDA(2)	86,764			64,933				33.6	%
Statistical Data:
Average number of worksite employees paid per month	160,956			140,545				14.5	%
Revenues per worksite employee per month(3)	$	1,563		$	1,574			(0.7	)%
Gross profit per worksite employee per month	273			278				(1.8	)%
Operating expenses per worksite employee per month	201			236				(14.8	)%
Operating income per worksite employee per month	72			42				71.4	%
Net income per worksite employee per month	44			25				76.0	%

 ____________________________________

⁽¹⁾  Includes non-cash impairment and other charges $11.1 million, or an after-tax effect of $0.26 per share in the 2015 period. Please read Note 4 to the Consolidated Financial Statements, “Impairment Charges and Other,” for additional information.

⁽²⁾  Please read “Non-GAAP Financial Measures” for a reconciliation of the non-GAAP financial measures to their most directly comparable financial measures calculated and presented in accordance with GAAP.

⁽³⁾  Gross billings of $9,036 and $9,064 per worksite employee per month, less payroll cost of $7,473 and $7,490 per worksite employee per month, respectively.

Revenues

Our revenues for the six months ended June 30, 2016increased13.7% over the 2015 period, primarily due to a 14.5%increase in the average number of worksite employees paid per month, partially offset by a 0.7%, or $11, decrease in revenues per worksite employee per month.

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We provide our PEO HR Outsourcing solutions to small and medium-sized businesses in strategically selected markets throughout the United States. Our revenue by region for our PEO HR Outsourcing solutions revenue for the six months ended June 30, 2016 and 2015 were as follows:

	Six Months Ended   June 30,						Six Months Ended   June 30,
	2016		2015		% Change		2016		2015
	(in thousands)						(% of total revenue)
Northeast	$	388,160	$	344,196	12.8	%	26.1	%	26.4	%
Southeast	157,539		129,546		21.6	%	10.6	%	9.9	%
Central	238,508		198,829		20.0	%	16.1	%	15.2	%
Southwest	355,833		334,233		6.5	%	24.0	%	25.6	%
West	344,644		297,396		15.9	%	23.2	%	22.9	%
	1,484,684		1,304,200		13.8	%	100.0	%	100.0	%
Other revenue(1)	25,056		23,117		8.4	%
Total revenue	$	1,509,740	$	1,327,317	13.7	%

______________________________

⁽¹⁾ Comprised primarily of revenues generated by our other products and services offerings.

The percentage of total PEO HR Outsourcing solutions revenues in our significant markets include the following:

	Six Months Ended June 30,
	2016		2015
Texas	22.4	%	23.9	%
California	18.5	%	18.1	%
New York	9.7	%	9.8	%
Other	49.4	%	48.2	%
Total	100.0	%	100.0	%

Our growth in the number of worksite employees paid is affected by three primary sources: new client sales, client retention and the net change in existing clients through worksite employee new hires and layoffs. During the first six months of 2016, we saw improvement in worksite employees paid from each of these sources as compared to the first six months of 2015.

Gross Profit

Gross profit for the first six months of 2016increased12.5% over the first six months of 2015 to $263.3 million. The average gross profit per worksite employee decreased1.8% to $273 per month in the 2016 period from $278 per month in the 2015 period. Included in gross profit is a $17 per worksite employee per month contribution from our other products and services offerings in both the 2016 and 2015 periods.

Our pricing objectives attempt to maintain or improve the gross profit per worksite employee by maintaining revenue per worksite employee to match or exceed changes in primary direct costs and operating expenses. Our revenues per worksite employee per month during the first six months of 2016decreased0.7% compared to the first six months of 2015. Our direct costs, which primarily include payroll taxes, benefits and workers’ compensation expenses, decreased0.5% to $1,290 per worksite employee per month in the first six months of 2016 compared to $1,296 in the first six months of 2015. The primary direct cost components changed as follows:

• Benefits costs – The cost of group health insurance and related employee benefits increased$1 per worksite employee per month, or 2.1% on a cost per covered employee basis, compared to the first six months of 2015. Included in 2016 benefits costs is a charge of $3.7 million, or $4 per worksite employee per month, for changes in estimated claim run-off related to prior periods. The percentage of worksite employees covered under our health insurance plans was 69.6% in

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the 2016 period compared to 71.0% in the 2015 period. 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 increased9.2% in part due to a 15.9% increase in the average non-bonus payroll, but decreased$2 on a per worksite employee per month basis, compared to the first six months of 2015. In the first six months of 2016, we recorded reductions in workers’ compensation costs of $2.6 million, or 0.04% of non-bonus payroll costs, for changes in estimated losses related to prior reporting periods. As a percentage of non-bonus payroll cost, workers’ compensation costs were 0.66% in the 2016 period compared to 0.70% in the 2015 period. Please read Note 2 to the Consolidated Financial Statements, “Accounting Policies – Workers’ Compensation Costs,” for a discussion of our accounting for workers’ compensation costs.

• Payroll tax costs – Payroll taxes increased14.0% in part due to a 14.3%increase in payroll costs, but decreased$3 on a per worksite employee per month basis, compared to the first six months of 2015. Payroll taxes as a percentage of payroll costs were 7.9% in both the 20162015 periods.  

Operating Expenses

The following table presents certain information related to our operating expenses:

	Six Months Ended June 30,						Six Months Ended June 30,
	2016		2015		% Change		2016		2015		% Change
	(in thousands)						(per worksite employee per month)
Salaries, wages and payroll taxes	$	114,013	$	106,982	6.6	%	$	118	$	127	(7.1	)%
Stock-based compensation	8,336		6,464		29.0	%	9		8		12.5	%
Commissions	8,616		8,407		2.5	%	9		10		(10.0	)%
Advertising	9,759		10,064		(3.0	)%	10		13		(23.1	)%
General and administrative expenses	45,038		45,430		(0.9	)%	46		53		(13.2	)%
Impairment charges and other	—		11,120		—		—		13		—
Depreciation and amortization	8,447		9,875		(14.5	)%	9		12		(25.0	)%
Total operating expenses	$	194,209	$	198,342	(2.1	)%	$	201	$	236	(14.8	)%

Operating expenses decreased2.1% to $194.2 million compared to $198.3 million in the first six months of 2015. Operating expenses per worksite employee per month decreased to $201 in the 2016 period from $236 in the 2015 period. We recorded impairment and other charges of $11.1 million during first six months of 2015. Please read Note 4 to the Consolidated Financial Statements, “Impairment Charges and Other,” for additional information. Adjusted operating expenses increased4.4% to $193.9 million in the 2016 period from $185.7 million in the 2015 period. Please read “—Non-GAAP Financial Measures” for additional information. The components of operating expenses changed as follows:

• Salaries, wages and payroll taxes of corporate and sales staff increased6.6%, but decreased$9 on a per worksite employee per month basis, compared to the 2015 period. This increase was primarily due to a 4.8% increase in corporate headcount, including an 11.6% increase in the number of Business Performance Advisors.

• Stock-based compensation increased29.0%, or $1 per worksite employee per month, compared to the 2015 period. This increase was primarily due to awards issued under the LTIP. Please read Note 7 to the Consolidated Financial Statements, “Long-Term Incentive Program,” for additional information.

• Commissions expense increased2.5%, but decreased $1 on a per worksite employee per month basis, compared to the 2015 period, primarily due to commissions associated with our PEO HR Outsourcing solutions.

• Advertising costs decreased3.0%, or $3 per worksite employee per month, compared to the 2015 period.

• General and administrative expenses, which includes $0.3 million in stockholder advisory expenses in the 2016 period, decreased0.9%, or $7 per worksite employee per month compared to the 2015 period. This decrease was due in part to lower consulting and professional fees.

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• Depreciation and amortization expense decreased14.5%, or $3 per worksite employee per month compared to the 2015 period, primarily due to certain acquired assets becoming fully depreciated in 2015 and the sale of our two aircraft in 2015, which eliminated the depreciation on those assets. Please read Note 4 to the Consolidated Financial Statements, “Impairment Charges and Other,” for additional information.

Income Tax Expense

Our effective income tax rate was 38.0% in the 2016 period compared to 40.9% in the 2015 period. Our provision for income taxes differed from the U.S. statutory rate of 35% primarily due to state income taxes, non-deductible expenses, and the effects of the impairment charges recorded during the period. In addition, during first quarter of 2016, as a result of our adoption of Accounting Standards Update No. 2016-09, Compensation - Stock Compensation (Topic 718): Improvements to Employee Share Based Payment Accounting, we recognized an income tax benefit of $1.0 million related to vesting of restricted stock awards. Please read Note 2 to the Consolidated Financial Statements, “Accounting Policies – New Accounting Pronouncements,” for additional information.

Operating and Net Income

Operating and net income per worksite employee per month was $72 and $44 in the 2016 period, versus $42 and $25 in the 2015 period.

Non-GAAP Financial Measures

Non-GAAP financial measures are not prepared in accordance with GAAP and may be different from non-GAAP financial measures used by other companies. Non-GAAP financial measures should not be considered as a substitute for, or superior to, measures of financial performance prepared in accordance with GAAP. Investors are encouraged to review the reconciliation of the non-GAAP financial measures used to their most directly comparable GAAP financial measures as provided in the tables below.

Non-bonus payroll cost is a non-GAAP financial measure that excludes the impact of bonus payrolls paid to our worksite employees. Bonus payroll cost varies from period to period, but has no direct impact to our ultimate workers’ compensation costs under the current program. As a result, our management refers to non-bonus payroll cost in analyzing, reporting and forecasting our workers’ compensation costs. We include these non-GAAP financial measures because we believe they are useful to investors in allowing for greater transparency related to the costs incurred under our current workers’ compensation program.

Following is a GAAP to non-GAAP reconciliation of non-bonus payroll costs:

	Three Months Ended   June 30,						Six Months Ended   June 30,
	2016		2015		% Change		2016		2015		% Change
	(in thousands, except per worksite employee per month data)
GAAP to non-GAAP reconciliation:
Payroll cost (GAAP)	$	3,455,077	$	3,074,892	12.4	%	$	7,217,142	$	6,315,874	14.3	%
Less: Bonus payroll cost	213,224		257,367		(17.2	)%	795,537		775,870		2.5	%
Non-bonus payroll cost	$	3,241,853	$	2,817,525	15.1	%	$	6,421,605	$	5,540,004	15.9	%
Payroll cost per worksite employee per month (GAAP)	$	7,043	$	7,161	(1.6	)%	$	7,473	$	7,490	(0.2	)%
Less: Bonus payroll cost per worksite employee per month	436		599		(27.2	)%	824		920		(10.4	)%
Non-bonus payroll cost per worksite employee per month	$	6,607	$	6,562	0.7	%	$	6,649	$	6,570	1.2	%

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Adjusted cash, cash equivalents and marketable securities excludes funds associated with federal and state income tax withholdings, employment taxes and other payroll deductions, as well as client prepayments. Insperity management believes adjusted cash, cash equivalents and marketable securities is a useful measure of the company’s available funds.

Following is a GAAP to non-GAAP reconciliation of cash, cash equivalents and marketable securities:

	June 30, 2016		December 31, 2015
	(in thousands)
Cash, cash equivalents and marketable securities (GAAP)	$	273,454	$	279,413
Less: Amounts payable for withheld federal and state income taxes, employment taxes and other payroll deductions	121,437		185,719
Customer prepayments	100,728		17,037
Adjusted cash, cash equivalents and marketable securities	$	51,289	$	76,657

Adjusted operating expenses represent operating expenses excluding the impact of impairment and other charges related to the sale of two aircraft in 2015 and stockholder advisory expenses in both periods. Insperity management believes adjusted operating expenses is a useful measure of our operating costs, as it allows for additional analysis of our operating expenses separate from the impact of these items.

Following is a GAAP to non-GAAP reconciliation of operating expenses and adjusted operating expenses:

	Three Months Ended   June 30,						Six Months Ended   June 30,
	2016		2015		% Change		2016		2015		% Change
	(in thousands, except per worksite employee per month data)
Operating expenses (GAAP)	$	97,236	$	92,002	5.7	%	$	194,209	$	198,342	(2.1	)%
Less: Impairment charges and other	—		1,313		—		—		11,120		—
Stockholder advisory expenses	323		398		(18.8	)%	323		1,546		(79.1	)%
Adjusted operating expenses	$	96,913	$	90,291	7.3	%	$	193,886	$	185,676	4.4	%
Operating expenses per worksite employee per month (GAAP)	$	198	$	215	(7.9	)%	$	201	$	236	(14.8	)%
Less: Impairment charges and other per worksite employee per month	—		3		—		—		13		—
Stockholder advisory expenses per worksite employee per month	1		1		—		—		2		—
Adjusted operating expenses per worksite employee per month	$	197	$	211	(6.6	)%	$	201	$	221	(9.0	)%

EBITDA represents net income computed in accordance with GAAP, plus interest expense, income tax expense and depreciation and amortization expense. Adjusted EBITDA represents EBITDA plus non-cash impairment and other charges, non-cash stock-based compensation and stockholder advisory expenses. Our management believes EBITDA and Adjusted EBITDA are often useful measures of our operating performance, as they allow for additional analysis of our operating results separate from the impact of these items.    

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Following is a GAAP to non-GAAP reconciliation of EBITDA and Adjusted EBITDA:

	Three Months Ended   June 30,						Six Months Ended   June 30,
	2016		2015		% Change		2016		2015		% Change
	(in thousands)
Net income (GAAP)	$	9,713	$	7,314	32.8	%	$	42,406	$	21,101	101.0	%
Income tax expense	5,953		4,863		22.4	%	25,965		14,603		77.8	%
Interest expense	650		124		424.2	%	1,287		224		474.6	%
Depreciation and amortization	4,176		4,590		(9.0	)%	8,447		9,875		(14.5	)%
EBITDA	20,492		16,891		21.3	%	78,105		45,803		70.5	%
Impairment charges and other	—		1,313		—		—		11,120		—
Stock-based compensation	4,761		4,041		17.8	%	8,336		6,464		29.0	%
Stockholder advisory expenses	323		398		(18.8	)%	323		1,546		(79.1	)%
Adjusted EBITDA	$	25,576	$	22,643	13.0	%	$	86,764	$	64,933	33.6	%

Adjusted net income and adjusted diluted net income per share of common stock represent net income and diluted net income per share computed in accordance with GAAP, excluding the impact of non-cash impairment and other charges related to the sale of two aircraft in 2015 and stockholder advisory expenses and non-cash stock-based compensation in both periods. Our management believes adjusted net income and adjusted diluted net income per share of common stock are useful measures of our operating performance, as they allow for additional analysis of our operating results separate from the impact of these items.

Following is a GAAP to non-GAAP reconciliation of adjusted net income:

	Three Months Ended   June 30,								Six Months Ended   June 30,
	2016			2015			% Change		2016			2015			% Change
	(in thousands)
Net income (GAAP)	$	9,713		$	7,314		32.8	%	$	42,406		$	21,101		101.0	%
Impairment charges and other	—			1,313			—		—			11,120			—
Stock-based compensation	4,761			4,041			17.8	%	8,336			6,464			29.0	%
Stockholder advisory expenses	323			398			(18.8	)%	323			1,546			(79.1	)%
Total non-GAAP adjustments	5,084			5,752			(11.6	)%	8,659			19,130			(54.7	)%
Tax effect on non-GAAP adjustments	(1,933		)	(2,295		)	(15.8	)%	(3,290		)	(7,824		)	(57.9	)%
Adjusted net income (non-GAAP)	$	12,864		$	10,771		19.4	%	$	47,775		$	32,407		47.4	%

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Following is a GAAP to non-GAAP reconciliation of adjusted diluted net income per share of common stock:

	Three Months Ended   June 30,								Six Months Ended   June 30,
	2016			2015			% Change		2016			2015			% Change
	(in thousands)
Diluted net income per share of common stock (GAAP)	$	0.45		$	0.29		55.2	%	$	1.98		$	0.83		138.6	%
Impairment charges and other	—			0.05			—		—			0.44			—
Stock-based compensation	0.22			0.16			37.5	%	0.39			0.25			56.0	%
Stockholder advisory expenses	0.02			0.02			—		0.02			0.06			(66.7	)%
Total non-GAAP adjustments	0.24			0.23			4.3	%	0.41			0.75			(45.3	)%
Tax effect on non-GAAP adjustments	(0.09		)	(0.10		)	(10.0	)%	(0.16		)	(0.30		)	(46.7	)%
Adjusted diluted net income per share of common stock	$	0.60		$	0.42		42.9	%	$	2.23		$	1.28		74.2	%

Liquidity and Capital Resources

We periodically evaluate our liquidity requirements, capital needs and availability of resources in view of, among other things, our expansion plans, stock repurchase, potential acquisitions, debt service requirements and other operating cash needs. To meet short-term liquidity requirements, which are primarily the payment of direct and operating expenses, we rely primarily on cash from operations. Longer-term projects, large share repurchases or significant acquisitions may be financed with debt or equity. We have in the past sought, and may in the future seek, to raise additional capital or take other steps to increase or manage our liquidity and capital resources. We had $273.5 million in cash, cash equivalents and marketable securities at June 30, 2016, of which approximately $121.4 million was payable in early July2016 for withheld federal and state income taxes, employment taxes and other payroll deductions, and approximately $100.7 million were customer prepayments that were payable in July2016. At June 30, 2016, we had working capital of $69.9 million compared to $54.3 million at December 31, 2015. We currently believe that our cash on hand, marketable securities, cash flows from operations and availability under our revolving credit facility will be adequate to meet our liquidity requirements for the remainder of 2016. We will rely on these same sources, as well as public and private debt or equity financing, to meet our longer-term liquidity and capital needs.

We have a $200 million revolving credit facility (“Facility”) with a syndicate of financial institutions. The Facility is available for working capital and general corporate purposes, including acquisitions and stock repurchases. As of June 30, 2016, we had an outstanding letter of credit and borrowings totaling $105.4 million under the Facility. Please read Note 5 to the Consolidated Financial Statements, “Long-Term Debt,” for additional information.

Cash Flows from Operating Activities

Net cash provided by operating activities in the first six months of 2016 was $60.7 million. Our primary source of cash from operations is the comprehensive service fee and payroll funding we collect from our clients. Our cash and cash equivalents, and thus our reported cash flows from operating activities are significantly impacted by various external and internal factors, which are reflected in part by the changes in our balance sheet accounts. These include the following:

• Timing of client payments / payroll levels – We typically collect our comprehensive service fee, along with the client’s payroll funding, from clients at least one day prior to the payment of worksite employee payrolls and associated payroll taxes. Therefore, the last business day of a reporting period has a substantial impact on our reporting of operating cash flows. For example, many worksite employees are paid on Fridays; therefore, operating cash flows decrease in the reporting periods that end on a Friday or a Monday. In the period ended June 30, 2016, the last business day of the reporting period was a Thursday, client prepayments were $100.7 million and accrued worksite employee payroll was $277.4 million. In the period ended June 30, 2015, the last business day of the reporting period was a Tuesday, client prepayments were $19.4 million and accrued worksite employee payroll was $228.1 million.

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• Workers’ compensation plan funding – Under our workers’ compensation insurance arrangements, we make monthly payments to the carriers comprised of premium costs and funds to be set aside for payment of future claims (“claim funds”). These pre-determined amounts are stipulated in our agreements with the carriers, and are based primarily on anticipated worksite employee payroll levels and workers’ compensation loss rates during the policy year. Changes in payroll levels from those that were anticipated in the arrangements can result in changes in the amount of cash payments, which will impact our reporting of operating cash flows. Our claim funds paid, based upon anticipated worksite employee payroll levels and workers’ compensation loss rates, were $29.5 million in the first six months of 2016 and $26.7 million in the first six months of 2015. However, our estimate of workers’ compensation incurred claims was $33.8 million in the 2016 period and $31.5 million in the 2015 period. During the first six months of 2016 and 2015, we received $12.8 million and $5.3 million, respectively, for the return of excess claim funds related to the workers’ compensation program. This resulted in an increase to working capital.

• Medical plan funding – Our health care contract with United establishes participant cash funding rates 90 days in advance of the beginning of a reporting quarter. Therefore, changes in the participation level of the United plan have a direct impact on our operating cash flows. In addition, changes to the funding rates, which are solely determined by United based primarily upon recent claim history and anticipated cost trends, also have a significant impact on our operating cash flows. As of June 30, 2016, premiums owed and cash funded to United have exceeded the costs of the United plan (the “Plan Costs”), resulting in a $22.9 million surplus, $13.9 million of which is reflected as a current asset, and $9.0 million of which is reflected as a long-term asset on our Consolidated Balance Sheets. The premiums, including additional quarterly premium, owed to United at June 30, 2016, were $23.0 million, which is included in accrued health insurance costs, a current liability, on our Consolidated Balance Sheets. Funding rates, as determined by United, resulted in $19.4 million of additional quarterly premium at June 30, 2016 as compared to $0.1 million in additional quarterly premium at June 30, 2015.

• Operating results – Our adjusted net income has a significant impact on our operating cash flows. Our adjusted net income increased47.4% to $47.8 million in the six months ended June 30, 2016, compared to $32.4 million in the six months ended June 30, 2015, due to higher gross profit. Please read “Results of Operations – Six Months Ended June 30, 2016 Compared to Six Months Ended June 30, 2015.”

Cash Flows from Investing Activities

Net cash flows used in investing activities were $4.7 million for the six months ended June 30, 2016, primarily due to property and equipment purchases of $12.6 million, offset by $7.9 million of marketable securities maturities and dispositions, net of purchases.

Cash Flows from Financing Activities

Net cash flows used in financing activities were $53.9 million for the six months ended June 30, 2016, primarily due to the $144.3 million used to repurchase common stock associated with the modified Dutch auction tender offer, which was funded in part with borrowings of $104.4 million under our Facility. Please read Note 5 to the Consolidated Financial Statements, “Long-Term Debt,” and Note 6 to the Consolidated Financial Statements, “Stockholders' Equity,” for additional information. In addition, we repurchased $4.8 million in stock and paid $10.0 million in dividends during the six months ended June 30, 2016.

ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

We are primarily exposed to market risks from fluctuations in interest rates and the effects of those fluctuations on the market values of our cash equivalent short-term investments, our available-for-sale marketable securities and our borrowings under our Facility bear interest at a variable market rate. 

 The cash equivalent short-term investments consist primarily of overnight investments, which are not significantly exposed to interest rate risk, except to the extent that changes in interest rates will ultimately affect the amount of interest income earned on these investments. The available-for-sale marketable securities are subject to interest rate risk because these securities generally include a fixed interest rate. As a result, the market values of these securities are affected by changes in prevailing interest rates.

As of June 30, 2016, we had an outstanding letter of credit and borrowings totaling $105.4 million under the Facility. Please read Note 5 to the Consolidated Financial Statements, “Long-Term Debt,” for additional information. 

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ITEM 4.  CONTROLS AND PROCEDURES.

In accordance with the Securities Exchange Act of 1934 Rules 13a-15 and 15d-15, we carried out an evaluation, under the supervision and with the participation of management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of our disclosure controls and procedures as of the end of the period covered by this report. Based on that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective as of June 30, 2016.

There has been no change in our internal controls over financial reporting that occurred during the three months ended June 30, 2016 that has materially affected, or is reasonably likely to materially affect, our internal controls over financial reporting.

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PART II

ITEM 1.  LEGAL PROCEEDINGS.

Please read Note 9 to the Consolidated Financial Statements, “Commitments and Contingencies,” which is incorporated herein by reference.

ITEM 1A.  RISK FACTORS.

Forward-Looking Statements

The statements contained herein that are not historical facts are forward-looking statements within the meaning of the federal securities laws (Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934). You can identify such forward-looking statements by the words “expects,” “intends,” “plans,” “projects,” “believes,” “estimates,” “likely,” “possibly,” “probably,” “goal,” “opportunity,” “objective,” “target,” “assume,” “outlook,” “guidance,” “predicts,” “appears,” “indicator” and similar expressions. Forward-looking statements involve a number of risks and uncertainties. In the normal course of business, Insperity, Inc., in an effort to help keep our stockholders and the public informed about our operations, may from time to time issue such forward-looking statements, either orally or in writing. Generally, these statements relate to business plans or strategies, projected or anticipated benefits or other consequences of such plans or strategies, or projections involving anticipated revenues, earnings, unit growth, profit per worksite employee, pricing, operating expenses or other aspects of operating results. We base the forward-looking statements on our expectations, estimates and projections at the time such statements are made. These statements are not guarantees of future performance and involve risks and uncertainties that we cannot predict. In addition, we have based many of these forward-looking statements on assumptions about future events that may prove to be inaccurate. Therefore, the actual results of the future events described in such forward-looking statements could differ materially from those stated in such forward-looking statements. Among the factors that could cause actual results to differ materially are: (i) adverse economic conditions; (ii) regulatory and tax developments and possible adverse application of various federal, state and local regulations; (iii) the ability to secure competitive replacement contracts for health insurance and workers’ compensation insurance at expiration of current contracts; (iv) cancellation of client contracts on short notice, or the inability to renew client contracts or attract new clients; (v) vulnerability to regional economic factors because of our geographic market concentration; (vi) increases in health insurance costs and workers’ compensation rates and underlying claims trends, health care reform, financial solvency of workers’ compensation carriers, other insurers or financial institutions, state unemployment tax rates, liabilities for employee and client actions or payroll-related claims; (vii) failure to manage growth of our operations and the effectiveness of our sales and marketing efforts; (viii) the impact of the competitive environment in the PEO industry on our growth and/or profitability; (ix) our liability for worksite employee payroll, payroll taxes and benefits costs; (x) our liability for disclosure of sensitive or private information; (xi) our ability to integrate or realize expected returns on our acquisitions; (xii) failure of our information technology systems; (xiii) an adverse final judgment or settlement of claims against Insperity; and (xiv) disruptions to our business resulting from the actions of certain stockholders. These factors are discussed in further detail in our 2015 Annual Report on Form 10-K under “Item 1A. Risk Factors” in Part I and “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, and elsewhere in this report. Any of these factors, or a combination of such factors, could materially affect the results of our operations and whether forward-looking statements we make ultimately prove to be accurate.

Except to the extent otherwise required by federal securities law, we do not undertake any obligation to update our forward-looking statements to reflect events or circumstances after the date they are made or to reflect the occurrence of unanticipated events.

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ITEM 2.  UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.

The following table provides information about purchases by Insperity during the three months ended June 30, 2016, of equity securities that are registered by Insperity pursuant to Section 12 of the Exchange Act:

Period	Total Number of Shares Purchased(1)	Average Price Paid per Share		Total Number of Shares Purchased as Part of Announced Programs(2)	Maximum Number of Shares Available for Purchase under Announced Program(2)
04/01/2016 – 04/30/2016	—	$	—	—	524,332
05/01/2016 – 05/31/2016	329	66.78		—	1,524,332
06/01/2016 – 06/30/2016	—	—		—	1,524,332
Total	329	$	66.78	—

 ____________________________________

⁽¹⁾  During May 2016, 329 shares of restricted stock were withheld to satisfy tax-withholding obligations arising in conjunction with the vesting of restricted stock. The required withholding is calculated using the closing sales price reported by the New York Stock Exchange on the date prior to the applicable vesting date. These shares are not subject to the repurchase program described above.

⁽²⁾  Our Board of Directors (the “Board”) has approved a program to repurchase shares of our outstanding common stock, including an additional one million shares authorized for repurchase in May 2016. During the three months ended June 30, 2016, no shares were repurchased under the program. As of June 30, 2016, we were authorized to repurchase an additional 1,524,332 shares under the program. Unless terminated earlier by resolution of the Board, the repurchase program will expire when we have repurchased all shares authorized for repurchase under the repurchase program.

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ITEM 6.  EXHIBITS.

(a) List of Exhibits

10.1		Agreement dated as of May 18, 2016, by and among Insperity, Inc. and Starboard Value LP and its affiliates (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed on May 19, 2016).
10.2(+)	*	Amendment to the Minimum Premium Financial Agreement, as amended effective January 1, 2015, by and between Insperity Holdings, Inc. and United HealthCare Insurance Company, effective as of January 1, 2016.
10.3(+)	*	Amendment to the Minimum Premium Administrative Services Agreement, as amended effective January 1, 2015, by and between Insperity Holdings, Inc. and United HealthCare Insurance Company, effective as of January 1, 2016.
31.1	*	Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2	*	Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1	**	Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2	**	Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS	*	XBRL Instance Document.(1)
101.SCH	*	XBRL Taxonomy Extension Schema Document.
101.CAL	*	XBRL Taxonomy Extension Calculation Linkbase Document.
101.DEF	*	XBRL Extension Definition Linkbase Document.
101.LAB	*	XBRL Taxonomy Extension Label Linkbase Document.
101.PRE	*	XBRL Taxonomy Extension Presentation Linkbase Document.

____________________________________
(+)	Confidential treatment has been requested for this exhibit and confidential portions have been filed with the Securities and Exchange Commission.
*	Filed with this report.
**	Furnished with this report.

⁽¹⁾  Attached as exhibit 101 to this report are the following documents formatted in XBRL (Extensible Business Reporting Language): (i) the Consolidated Statements of Operations for the three and six month periods ended June 30, 2016 and 2015; (ii) the Consolidated Balance Sheets at June 30, 2016 and December 31, 2015; (iii) the Consolidated Statement of Stockholders’ Equity for the six month period ended June 30, 2016; (iv) the Consolidated Statements of Cash Flows for the six month periods ended June 30, 2016 and 2015; and (v) Notes to the Consolidated Financial Statements.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	Insperity, Inc.
Date: August 1, 2016	By:	/s/ Douglas S. Sharp
		Douglas S. Sharp
		Senior Vice President of Finance,
		Chief Financial Officer and Treasurer
		(Principal Financial Officer)

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EX-10.2

*** indicates material has been omitted pursuant to a Confidential Treatment Request filed with the Securities and Exchange Commission. A complete copy of this agreement has been filed separately with the Securities and Exchange Commission.

Exhibit 10.2

AMENDMENT TO THE MINIMUM PREMIUM

FINANCIAL AGREEMENT,

AS AMENDED EFFECTIVE JANUARY 1, 2015,

BY AND BETWEEN

INSPERITY HOLDINGS, INC. (fka ADMINISTAFF OF TEXAS, INC.)

AND

UNITED HEALTHCARE INSURANCE COMPANY

THIS AMENDMENT TO THE MINIMUM PREMIUM FINANCIAL AGREEMENT, as amended effective January 1, 2015, (the “MP Financial Agreement”) is entered into as of January 1, 2016, by and between Insperity Holdings, Inc. (f/k/a Administaff of Texas, Inc.)(the “Employer”), a Texas corporation, and United Healthcare Insurance Company (the “Company”), a Connecticut corporation (this “Amendment”).

RECITALS

WHEREAS, on or about June 25, 2002, the Employer and the Company executed the

Minimum Premium Financial Agreement effective January 1, 2002 ("Original Agreement"); and

WHEREAS, effective January 1, 2005, the Employer and the Company executed the MP Financial Agreement to amend and restate the Original Agreement (terms capitalized in this Amendment not for grammatical reasons and not otherwise defined in this Amendment shall have the meanings ascribed to them in the MP Financial Agreement); and

WHEREAS, effective January 1, 2008, January 1, 2009, January 1, 2011, January 1, 2013, and January 1, 2015, the Employer and the Company amended the MP Financial Agreement; and

WHEREAS, the Employer and the Company now wish to further amend the MP Financial Agreement pursuant to the terms of this Amendment effective January 1, 2016, unless otherwise stated herein.

NOW, THEREFORE, in consideration of the following mutual covenants and promises, the parties agree as follows:

ARTICLE I

Policies, Rates and Factors

Section1.1. Policies, Rates and Factors. Exhibit D to the MP Financial Agreement is hereby amended and restated in its entirety to read, effective January 1, 2016:

Exhibit D- Policies, Rates and Factors

I. The definition of “Policy” for purposes of Section 1(s) of the Agreement shall be as follows:

• Effective January 1, 2016: No. *** (Medical *** and ***.) (“Policy'') which policy numbers are amended from time to time in the normal course of business, including all individuals, dependents and/or other persons enrolled in COBRA or state continuation coverage.

II. The “Maximum Monthly Employer Benefit Obligation"' (the “MMEBO”) shall be the following:

•        Effective January 1, 2016

o The Quoted Premium effective January 1, 2016 for each Policy minus the *** effective January l, 2016

•        Effective January 1, 2017

o The Quoted Premium effective January 1, 2017 for each Policy minus the *** effective January l, 2017

•        Effective January 1, 2018

o The Quoted Premium effective January 1, 2018 for each Policy minus the *** effective January l, 2018

•        Effective January 1, 2019

o The Quoted Premium effective January 1, 2019 for each Policy minus the *** effective January l, 2019

III.     The “MP Premium” shall be the following:

Effective January 1, 2016:

o The total of the estimated *** and *** and ***, calculated as a fixed dollar amount during the Arrangement Period and trued up in

2

normal course, for each Policy plus the sum of the 2016 *** and *** (the ''2016 ***'')

Effective January 1, 2017:

• The total of the estimated *** and *** calculated as a fixed dollar amount during the Arrangement Period     and trued up in normal course, for each Policy plus the 2017 *** (the ''2017 ***'')

Effective January 1, 2018:

o The total of the estimated *** and *** and ***, calculated as a fixed dollar amount during the Arrangement Period and trued up in normal course, for each Policy plus the 2018 *** (the ''2018 ***'')

Effective January 1, 2019:

o The total of the estimated *** and *** and ***, calculated as a fixed dollar amount during the Arrangement Period and trued up in normal course, for each Policy plus the 2019 *** (the ''2019 ***'')

IV.     The "***" shall be the following:

a. 2016***: The *** portion of the 2015 *** will be *** by *** and the *** and *** portion of the 2015 *** will be *** by ***.

b. 2017***: The 2017 *** will be based on the 2016 *** by:

*** if *** as of Feb.15, 2017, exceeds ***;

*** if *** as of Feb. 15, 2017, is less than ***.

c.     2018***: The 2018 *** will be based on the 2017 *** by:

*** if *** as of Feb. 15, 2018, exceeds ***;

*** if *** as of Feb. 15, 2018, is less than ***.

d.     2019***: The 2019 *** will be based on the 2018 *** by:

*** if *** as of Feb. 15, 2019, exceeds ***;

*** if *** as of Feb. 15, 2019, is less than ***.

3

V. If *** below the thresholds set forth below, the *** and *** portion of the *** increases by the percentage in the table. Calculation of the "***" is defined in Section VI of this Exhibit D.

*** in the *** below	***	***	***	***
*** Increase	***	***	***	***
*** Increase		***	***	***

VI. For purposes of the table in Section V of this Exhibit D, *** shall be determined each *** based upon the following parameters:

• *** is defined to include *** for coverage in the Policy and *** for coverage under *** (*** as ***) policies with Employer, which policies are amended from time to time in the normal course of business, including all ***, *** and/or *** in COBRA or state continuation coverage.

• *** shall be measured each January 1st, April 1st, July 1st and October 1st, based upon the *** in effect on the 15th day of the preceding month. The *** as of the 15th of the month preceding each of January 1st, April 1st, July 1st and October 1st, shall be the *** that is used to determine the ***, *** and *** for the *** beginning that immediately following January 1st, April 1st, July 1st, and October 1st. For example, to determine the ***, *** and *** for the *** beginning ***, 2016 and ending ***, 2016, the *** as of December 15, 2015 shall be used.

VII. The applicable year's *** Fee shall be billed separately to Employer. ***, ***, the *** Fee and *** Fee will continue to be a pass through of actual expenses.

ARTICLE II

COOPERATION

Section 2.1 Cooperation. The Parties agree to execute such further documents and to take such further actions as may be necessary to implement and carry out the terms and conditions of this Amendment.

Section 2.2     Publicity. The parties acknowledge and agree that the terms and conditions of this Amendment and the Letter of Agreement dated August 28, 2015, including the existence thereof,

4

are subject to the provisions of section 5(e) of the Minimum Premium Administrative Services Agreement.

Article III

AGREEMENT PERIOD

Section 3.1 Term and Termination of the Agreement. Section 4(a) of the Minimum Premium Financial Agreement, effective January 1, 2005, is hereby amended and is restated in its entirety to read as follows:

Section 4     Term and Termination of the Agreement

(a) The Agreement shall be effective as of January 1, 2016 (“Effective Date”). The Agreement shall be in effect through December 31, 2019 and shall continue automatically for successive Agreement Periods of twelve (12) months each, unless it is discontinued in accordance with this section 4.

[The balance of this page intentionally is left blank. The signature page follows.]

5

IN WITNESS WHEREOF, the parties have caused this Amendment to the MP Financial Agreement to be executed as of the date set forth in the preamble.

INSPERITY HOLDINGS, INC.             UNITED HEALTHCARE INSURANCE                                 COMPANY

By:     /s/ Richard G. Rawson            By:     /s/ Anthony R. Carr            

Authorized Signature                    Authorized Signature

Name         Richard G. Rawson            Name     Anthony R. Carr            

Title         President                Title     National Vice President, PEO        

Date         June 8, 2016                Date     June 10, 2016                

6

EX-10.3

*** indicates material has been omitted pursuant to a Confidential Treatment Request filed with the Securities and Exchange Commission. A complete copy of this agreement has been filed separately with the Securities and Exchange Commission.

Exhibit 10.3

AMENDMENT TO THE MINIMUM PREMIUM ADMINISTRATIVE SERVICES AGREEMENT,

AS AMENDED EFFECTIVE JANUARY 1, 2015,

BY AND BETWEEN

INSPERITY HOLDINGS, INC. (fka ADMINISTAFF OF TEXAS, INC.),

AND

UNITED HEALTHCARE INSURANCE COMPANY

THIS AMENDMENT TO THE MINIMUM PREMIUM ADMINISTRATIVE SERVICES AGREEMENT, as amended effective January 1, 2015, (the “Administrative Services Agreement”) is entered into as of January 1, 2016, by and between Insperity Holdings, Inc., of Texas, Inc. (the “Employer”), a Texas corporation, and United Healthcare Insurance Company (the “Company”), a Connecticut corporation (this “Amendment”).

RECITALS

WHEREAS, on or about June 25, 2002, the Employer and the Company executed the Minimum Premium Administrative Services Agreement effective January 1, 2002 (“Original Agreement”); and

WHEREAS, effective January 1, 2005, the Employer and the company executed the Administrative Services Agreement to amend and restate the Original Agreement: and

WHEREAS, effective January 1, 2008, January 1, 2011, January 1, 2013, and January 1, 2015, the Employer and the Company amended the Administrative Services Agreement; and

WHEREAS, the Employer and the Company now wish to further amend the Administrative Services Agreement pursuant to the terms of this Amendment effective January 1, 2016, unless otherwise stated herein.

NOW, THEREFORE, in consideration of the following mutual covenants and promises, the parties agree as follows:

ARTICLE I

ALTERNATE VENDORS

Section 1.1: Exhibit F of the Administrative Services Agreement is hereby amended and is restated in its entirety to read as follows:

Exhibit F- Alternate Vendors

A. Except as otherwise set forth in this Exhibit F, the Company shall have the right to be the exclusive provider of medical and dental coverage for Employees; provided, however, that execution of an agreement between the Company and the Employer with

respect to the Company's right to be the exclusive provider of dental coverage for Employees with respect to certain geographical coverage areas ('"Dental Agreement") shall cause this Agreement and the MP Financial Agreement (including any exhibits or appendices to either) to be modified effective as of the effective date of the Dental Agreement to delete any effect on or reference to dental benefits, coverage, policies, or exclusivity rights as to the provision of dental coverage to employees of the Employer, and shall be interpreted in a manner consistent therewith.

B.    Exceptions to the Company's Right to be Exclusive Provider

1. If there is a *** to the Company *** network in a Market, or if no group health insurance or similar product offered by the Company is Competitive in that Market, the Employer may offer, subject to this section B of this Exhibit F, the health insurance or similar products of a Competing Vendor in such market.

a. The health insurance or similar products of a Competing Vendor may not be offered to Existing Company membership until after December 31, 2019, unless there is *** or required by Federal or State law.

b. If Employer introduces a Competing Vendor, the following provisions shall apply as long as the Company continues to write new group policies in that market:

(i.) Employer agrees to *** unilaterally to the Competing Vendor; and

(ii.) Existing Clients will be offered a choice at the time of the Client's contract renewal between the Company and Competing Vendor coverage options; and

(iii.) The choice between the Company and the Competing Vendor's coverage options shall only be *** at the *** and in no event *** to the ***.

c. Only *** Competing Vendor will be introduced into a limited number of Markets, not to exceed *** Markets, through December 31, 2019. This Market limitation may be increased if both parties determine that Federal or State law requires more Competing Vendors to be offered in a Market.

d. Company will be notified at least 90 days prior to the introduction of a Competing Vendor into a Market.

e. In no event will a Competing Vendor be introduced in the ***, which market includes *** and *** and *** markets. These markets will remain exclusive markets to the Company. If agreed to by both parties, the exclusivity requirement will be modified if changes are mandated by Federal or State law (to the extent not previously addressed in subparagraph (a) to this Section 1).

2

f. Notwithstanding any provision of Exhibit F to the contrary, the exclusivity provisions shall not apply to any county where *** following a *** where there is no ***.

g. Notwithstanding any provision of Exhibit F to the contrary, the exclusivity provisions shall not apply to any *** business policies (*** business policies are those issued to *** with *** eligible employees).

h. Notwithstanding any provision of Exhibit F to the contrary, the exclusivity provisions shall not apply to prevent Employer from offering *** or another Competing Vendor in ***.

i. Notwithstanding any provision of Exhibit F to the contrary, the exclusivity provisions shall not apply to prevent Employer from offering *** or another Competing Vendor in ***.

j. Notwithstanding any provision of Exhibit F to the contrary, the exclusivity provisions shall not apply to prevent Employer from offering alternative *** coverage (but not *** coverage) through *** or *** in ***.

k. Company will be the exclusive Vendor for *** coverage offered in the *** markets. If agreed to by both parties, the exclusivity requirement will be modified if changes are mandated by Federal or State law.

l. Where a State or municipality requires issuance of small business policies directly to Clients and/or Employees, Employer will not be subject to this exclusivity provision for those Clients and/or Employees. This section does not prohibit a Client or Employee from selecting coverage in a Federal, State or private exchange, provided that *** the Client or Employee from selecting coverage in an exchange.

m. Employer and Company will work together to find mutually agreeable parameters for any *** ("***") *** by Employer.

2. Removal or Addition of the Company’s HMOs and Other Products

a. If at any time the HMO Substitute offered by the Employer through the Company ceases to be Competitive, the Employer may in its sole discretion cease offering such product. In any such case, the Employer shall notify the Company of its opinion concerning the Competitive status of such product at least *** before it ceases offering the product and shall have the burden of undertaking the steps required to confirm the same in accordance with section B of this Exhibit F. If the Company's HMO Substitute becomes Competitive within *** after its receipt of the Employer's notice, the Employer may not replace it unless and until it is again not

3

Competitive, in which case a new notice shall be required and a new *** corrective period will begin. Such offering is subject to the following provisions if Company continues to write new group policies in that certain Market:

(i.) Employer agrees to *** to the Competing Vendor;

(ii.) Existing Clients will be offered a choice at the time of the Client's contract renewal between the Company and Competing Vendor coverage options; and

(iii.) The choice between the Company and the Competing Vendor's coverage options shall only be *** at the *** and in no event *** to the ***.

b. If, at the time the Company begins to offer an HMO Substitute which is Competitive in a certain market, the Employer is offering an HMO through a Competing Vendor consistent with the provisions of this Exhibit F in that market, the Employer shall offer each Client in such market coverage options for Employees in such market not later than the renewal date of such Client's service agreement consisting of either (i) subject to Section C of this Exhibit F, the *** and *** options or (ii) such Competing Vendor's *** and, at the Competing Vendor's ***, its ***.

3. Acquisition by Employer of another Professional Employer Organization

The Employer's use of Competing Vendors to provide coverage to New PEO Clients will not violate the provisions of section 6(b)(iv) of the Agreement or this Exhibit F if such coverage complies with the provisions of section 6(f) of the Agreement.

C.     Continuation of Company HMO in***

The parties agree to renew existing *** (*** as ***) coverage to the end of calendar year 2019 in the *** market.

D. Alternate Vendors

In the event of *** in the use of *** by businesses within Insperity’s target customer base, which *** Insperity’s *** to *** or ***, the parties agree to:

a. Cooperate in good faith to ease the exclusivity provisions of the Agreement to accommodate a *** offering competitive with the marketplace, however, such easing shall be to the extent minimally necessary to achieve a competitive offering;

b. Restrict any *** offering to *** at the ***;

4

c. Maintain the existing Agreement for the remainder of the term of the Agreement.

E.     Definitions

As used in this Exhibit F, capitalized terms shall have the meanings assigned to them in the Minimum Premium Administrative Services Agreement to which this Exhibit F is attached or, if no meaning is so assigned, the meaning set forth in this section E of Exhibit F.

a. "Competing Vendor" means a vendor of medical coverage products in a particular geographic market other than the Company.

b. "Competitive" means that either (i) the Company and the Employer agree or (ii) an independent consultant chosen by mutual agreement of the parties has determined, that such product ranks either *** or *** as compared to competing products of other vendors in the designated market. In making any determination of the rank of a product in a market, such consultant shall apply such criteria relating to *** and *** as it shall determine appropriate. All fees and expenses of any such consultant paid by the Employer.

c. "Existing Client" means a Client which is covered under a Company *** or *** as of the date such determination is made under Section B of this Exhibit F.

d. "HMO" means a product issued by a licensed "health maintenance organization" and offered as a network only or lock in product. Any references in this Exhibit F to the Company's "HMOs" shall include any HMO issued by the Company (or another member of the Company's controlled group).

c. Each of the following geographic areas are defined as a "Market" under this

Agreement:

I.    ***

II.     ***

III.        ***

IV.         ***

V.     *** (this includes membership in *** and *** metros)

VI.    *** (*** includes ***)

VII.     ***

VIII.    ***

IX.     ***

X.     ***

5

XL     ***

XII.     ***

XIII.     ***

XIV.     ***

XV.     ***

XVI.     ***

XVII.     ***

XVIII.     ***

XIX.     ***

XX.     ***

XXI.     ***

XXII.        ***

XXIII.     ***

XXIV.    ***

XXV.    ***

XXVI.    ***

XXVII.    ***

XXVIII.    ***

XXIX.    ***

XXX.    ***

XXXI.    ***

XXXII.     ***

XXXIII.    ***

XXXIV.     ***

XXXV.     ***

XXXVI.     ***

XXXVII.    ***

XXXVIII. ***

XXXIX.    ***

XL.    ***

XLI.    ***

XLII    ***

XLIII.     ***

XLIV.        ***

XLV.    ***

XLVI.     ***

XLVII.    ***

XLVIII.     ***

XLIX.     ***

L.         ***

LI.     ***

6

LII.    ***

f . "PPO" means any product for network coverage that is not an HMO, the HMO Substitute or an EPO.

g. "EPO" means a product issued by a licensed "insurance company" and offered as a network only or lock in product

h. "HMO Substitute" means the *** benefit plan (which includes both in­ network and out-of- network benefits) developed and offered to the Employer by the Company as a substitute for Company's HMO products in connection with Section B of this Exhibit F.

i. ''***" means that either (i) the Company and the Employer agree or (ii) an independent consultant chosen by mutual agreement of the parties has determined, that Company's network in a Market has been ***. In order to determine if there is a ***, the consultant shall apply reasonable criteria to determine that both (a) the *** imposes a *** to the Employer's ability to add new clients in the market; and (b) the addition of a new vendor *** the Employer's *** in adding new clients in the market All fees and expenses of any such consultant shall be paid by the Employer.

ARTICLE II

AGREEMENT PERIOD

Section 2.1: Section 9 of the Administrative Services Agreement, as amended, is hereby amended and is restated in its entirety to read as follows:

Section 9: Effective Date and Agreement Period

Except as otherwise specifically provided herein, the provisions of the Agreement shall be effective as of January 1, 2016 (“Effective Date”). The Agreement shall be in effect through December 31, 2019, and shall continue automatically for successive Agreement Periods of twelve (12) months each, unless it is discontinued earlier in accordance with section 11 of the Agreement.

ARTICLE III

COOPERATION

Section 2.1Cooperation. The Parties agree to execute such further documents and to take such further actions as may be necessary to implement and carry out the terms and conditions of this Amendment.

7

Section 2.2     Publicity. The parties acknowledge and agree that the terms and conditions of this Amendment and the Letter of Agreement dated August 28, 2015, including the existence thereof, are subject to the provisions of section 5(e) of the Administrative Services Agreement.

Article IV

EFFECTIVE DATE OF AMENDMENT

Section 3.1Effective Date. This Amendment shall be effective as of January 1, 2016, unless otherwise stated herein.

[The balance of this page intentionally is left blank. The signature page follows.]

8

IN WITNESS WHEREOF, the parties have caused this Amendment to the Administrative Services Agreement to be executed as of the date set forth in the preamble.

INSPERITY HOLDINGS, INC.             UNITED HEALTHCARE INSURANCE                                 COMPANY

By:     /s/ Richard G. Rawson            By:     /s/ Anthony R. Carr            

Authorized Signature                    Authorized Signature

Name         Richard G. Rawson            Name     Anthony R. Carr            

Title         President                Title     National Vice President, PEO        

Date         June 8, 2016                Date     June 10, 2016                

9

EX-31.1

Exhibit 31.1

CERTIFICATION

I, Paul J. Sarvadi, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Insperity, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 1, 2016
	/s/ Paul J. Sarvadi
	Paul J. Sarvadi
	Chairman of the Board and Chief Executive Officer

EX-31.2

Exhibit 31.2

CERTIFICATION

I, Douglas S. Sharp, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Insperity, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 1, 2016
	/s/ Douglas S. Sharp
	Douglas S. Sharp
	Senior Vice President of Finance, Chief Financial Officer and Treasurer

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO SECTION 906

OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Insperity, Inc. (the “Company”) on Form 10-Q for the period ending June 30, 2016, (the “Report”), as filed with the Securities and Exchange Commission on the date hereof, I, Paul J. Sarvadi, Chairman of the Board and Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. §1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002, to the best of my knowledge, that:

1. The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ Paul J. Sarvadi

Paul J. Sarvadi

Chairman of the Board and Chief Executive Officer

August 1, 2016

EX-32.2

 Exhibit 32.2

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO SECTION 906

OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Insperity, Inc. (the “Company”) on Form 10-Q for the period ending June 30, 2016, (the “Report”), as filed with the Securities and Exchange Commission on the date hereof, I, Douglas S. Sharp, Senior Vice President of Finance, Chief Financial Officer and Treasurer of the Company, certify, pursuant to 18 U.S.C. §1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002, to the best of my knowledge, that:

1. The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ Douglas S. Sharp

Douglas S. Sharp

Senior Vice President of Finance,

Chief Financial Officer and Treasurer

August 1, 2016

XML

Document and Entity Information - shares	6 Months Ended
	Jun. 30, 2016	Jul. 25, 2016
Entity Information [Line Items]
Entity Registrant Name	INSPERITY, INC.
Entity Central Index Key	0001000753
Current Fiscal Year End Date	--12-31
Entity Well-known Seasoned Issuer	Yes
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		21,395,482
Document Fiscal Year Focus	2016
Document Fiscal Period Focus	Q2
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Jun. 30, 2016

XML

CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015
Current assets:
Cash and cash equivalents	$ 271,573	$ 269,538
Restricted cash	41,226	37,418
Marketable securities	1,881	9,875
Accounts receivable, net:
Trade	3,977	7,691
Unbilled	236,422	190,715
Other	4,613	2,259
Prepaid insurance	26,545	7,417
Other current assets	18,554	17,135
Income taxes receivable	6,690	0
Total current assets	611,481	542,048
Property and equipment:
Land	5,214	5,214
Buildings and improvements	77,715	70,273
Computer hardware and software	93,458	90,654
Software development costs	48,634	45,762
Furniture, fixtures and other	40,195	39,919
Total property and equipment, gross	265,216	251,822
Accumulated depreciation and amortization	(197,545)	(190,063)
Total property and equipment, net	67,671	61,759
Other assets:
Prepaid health insurance	9,000	9,000
Deposits – health insurance	4,700	3,700
Deposits – workers’ compensation	130,731	136,462
Goodwill and other intangible assets, net	13,338	13,588
Deferred income taxes, net	7,562	16,976
Other assets	2,012	1,379
Total other assets	167,343	181,105
Total assets	846,495	784,912
Current liabilities:
Accounts payable	3,546	5,381
Payroll taxes and other payroll deductions payable	141,213	205,393
Accrued worksite employee payroll cost	277,376	161,917
Accrued health insurance costs	26,920	13,643
Accrued workers’ compensation costs	43,294	39,053
Accrued corporate payroll and commissions	24,375	39,103
Other accrued liabilities	24,823	20,250
Income taxes payable	0	2,971
Total current liabilities	541,547	487,711
Noncurrent liabilities:
Accrued workers’ compensation costs	135,681	124,746
Long-term debt	104,400	0
Total noncurrent liabilities	240,081	124,746
Commitments and contingencies
Stockholders’ equity:
Common stock	277	308
Additional paid-in capital	4,428	144,701
Treasury stock, at cost	(205,018)	(205,325)
Retained earnings	265,180	232,771
Total stockholders’ equity	64,867	172,455
Total liabilities and stockholders’ equity	$ 846,495	$ 784,912

XML

CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Income Statement [Abstract]
Revenues (gross billings of $4.163 billion, $3.703 billion, $8.727 billion and $7.643 billion less worksite employee payroll cost of $3.456 billion, $3.075 billion, $7.217 billion and $6.316 billion, respectively)	$ 707,332	$ 627,838	$ 1,509,740	$ 1,327,317
Direct costs:
Payroll taxes, benefits and workers’ compensation costs	594,073	523,619	1,246,465	1,093,238
Gross profit	113,259	104,219	263,275	234,079
Operating expenses:
Salaries, wages and payroll taxes	55,998	50,234	114,013	106,982
Stock-based compensation	4,761	4,041	8,336	6,464
Commissions	4,335	4,103	8,616	8,407
Advertising	6,712	6,883	9,759	10,064
General and administrative expenses	21,254	20,838	45,038	45,430
Impairment charges and other	0	1,313	0	11,120
Depreciation and amortization	4,176	4,590	8,447	9,875
Total operating expenses	97,236	92,002	194,209	198,342
Operating income	16,023	12,217	69,066	35,737
Other income (expense):
Interest income	293	84	592	191
Interest expense	(650)	(124)	(1,287)	(224)
Income before income tax expense	15,666	12,177	68,371	35,704
Income tax expense	5,953	4,863	25,965	14,603
Net income	9,713	7,314	42,406	21,101
Less distributed and undistributed earnings allocated to participating securities	229	179	962	521
Net income allocated to common shares	$ 9,484	$ 7,135	$ 41,444	$ 20,580
Basic net income per share of common stock (in dollars per share)	$ 0.45	$ 0.29	$ 1.98	$ 0.83
Diluted net income per share of common stock (in dollars per share)	$ 0.45	$ 0.29	$ 1.98	$ 0.83

XML

CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) (Parenthetical) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Income Statement [Abstract]
Gross billings	$ 4,163	$ 3,703	$ 8,727	$ 7,643
Worksite employee payroll costs	$ 3,456	$ 3,075	$ 7,217	$ 6,316

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CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY (Unaudited) - 6 months ended Jun. 30, 2016 - USD ($) shares in Thousands, $ in Thousands	Total	Common Stock [Member]	Additional Paid-In Capital [Member]	Treasury Stock [Member]	Retained Earnings [Member]
Balance at Dec. 31, 2015	$ 172,455	$ 308	$ 144,701	$ (205,325)	$ 232,771
Purchase of treasury stock, at cost	(4,790)	0	0	(4,790)	0
Repurchase of common stock	(144,263)	(31)	(144,232)	0	0
Stock-based compensation expense	8,336	0	3,689	4,647	0
Other	720	0	270	450	0
Dividends paid	(9,997)	0	0	0	(9,997)
Net income	42,406	0	0	0	42,406
Balance at Jun. 30, 2016	$ 64,867	$ 277	$ 4,428	$ (205,018)	$ 265,180
Balance (shares) at Dec. 31, 2015		30,758
Repurchase of common stock (shares)		(3,014)
Dividends paid (shares)	0
Balance (shares) at Jun. 30, 2016		27,744

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CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015
Cash flows from operating activities:
Net income	$ 42,406	$ 21,101
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Depreciation and amortization	8,447	9,875
Impairment charges and other	0	11,120
Amortization of marketable securities	52	629
Stock-based compensation	8,336	6,464
Deferred income taxes	9,414	(5,250)
Changes in operating assets and liabilities:
Restricted cash	(3,808)	(4,847)
Accounts receivable	(44,347)	(90,515)
Prepaid insurance	(19,128)	4,842
Other current assets	(1,419)	2,127
Other assets	4,104	3,136
Accounts payable	(1,835)	(2,291)
Payroll taxes and other payroll deductions payable	(64,180)	(53,466)
Accrued worksite employee payroll expense	115,459	35,695
Accrued health insurance costs	13,277	(12,045)
Accrued workers’ compensation costs	15,176	12,139
Accrued corporate payroll, commissions and other accrued liabilities	(11,627)	(7,349)
Income taxes payable/receivable	(9,661)	(2,844)
Total adjustments	18,260	(92,580)
Net cash provided by (used in) operating activities	60,666	(71,479)
Marketable securities:
Purchases	(310)	(5,379)
Proceeds from dispositions	7,268	6,877
Proceeds from maturities	990	4,851
Property and equipment:
Purchases	(12,647)	(5,850)
Net cash provided by (used in) investing activities	(4,699)	499
Cash flows from financing activities:
Purchase of treasury stock	(4,790)	(31,370)
Payments for Repurchase of Common Stock	(144,263)	0
Dividends paid	(9,997)	(10,407)
Proceeds from the exercise of stock options	0	374
Income tax benefit from stock-based compensation	0	2,972
Borrowings under long-term debt agreement	124,400	0
Principal repayments	(20,000)	0
Other	718	683
Net cash used in financing activities	(53,932)	(37,748)
Net increase (decrease) in cash and cash equivalents	2,035	(108,728)
Cash and cash equivalents at beginning of period	269,538	276,456
Cash and cash equivalents at end of period	$ 271,573	$ 167,728

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Basis of Presentation

6 Months Ended

Jun. 30, 2016

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Basis of Presentation

1. Basis of Presentation

Insperity, Inc., a Delaware corporation (“Insperity,” “we,” “our,” and “us”), provides an array of human resources (“HR”) and business solutions designed to help improve business performance. Our most comprehensive HR services offerings are provided through our professional employer organization (“PEO”) services, known as Workforce Optimization^® and Workforce Synchronization^TM solutions (together, our “PEO HR Outsourcing solutions”), which encompass a broad range of HR functions, including payroll and employment administration, employee benefits, workers’ compensation, government compliance, performance management, and training and development services, along with our cloud-based human capital management platform, the Employee Service Center^SM.

In addition to our PEO HR Outsourcing solutions, we offer a number of other business performance solutions, including Human Capital Management, Payroll Software, Time and Attendance, Performance Management, Organizational Planning, Recruiting Services, Employment Screening, Financial and Expense Management services, Retirement Services and Insurance Services, many of which are offered via desktop applications and cloud-based delivery models. These other products and services are offered separately, as a bundle, or along with our PEO HR Outsourcing solutions.

The Consolidated Financial Statements include the accounts of Insperity and its wholly owned subsidiaries. Intercompany accounts and transactions have been eliminated in consolidation.

The preparation of financial statements in conformity with accounting principles generally accepted in the United States (“GAAP”) requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes.  Actual results could differ from those estimates.

The accompanying Consolidated Financial Statements should be read in conjunction with our audited Consolidated Financial Statements at and for the year ended December 31, 2015. Our Consolidated Balance Sheet at December 31, 2015 has been derived from the audited financial statements at that date, but does not include all of the information or footnotes required by GAAP for complete financial statements.  Our Consolidated Balance Sheet at June 30, 2016 and our Consolidated Statements of Operations for the three and six month periods ended June 30, 2016 and 2015, our Consolidated Statements of Cash Flows for the six month periods ended June 30, 2016 and 2015, and our Consolidated Statement of Stockholders’ Equity for the six month period ended June 30, 2016, have been prepared by us without audit. In the opinion of management, all adjustments, consisting only of normal recurring adjustments necessary to present fairly the consolidated financial position, results of operations and cash flows, have been made. Certain prior year amounts have been reclassified to conform to the 2016 presentation.

The results of operations for the interim periods are not necessarily indicative of the operating results for a full year or of future operations.

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Accounting Policies

6 Months Ended

Jun. 30, 2016

Accounting Policies [Abstract]

Accounting Policies

2. Accounting Policies

Health Insurance Costs

We provide group health insurance coverage to our worksite employees through a national network of carriers, including UnitedHealthcare (“United”), UnitedHealthcare of California, Kaiser Permanente, Blue Shield of California, HMSA BlueCross BlueShield, and Tufts, all of which provide fully insured policies or service contracts.

The policy with United provides the majority of our health insurance coverage. As a result of certain contractual terms, we have accounted for this plan since its inception using a partially self-funded insurance accounting model. Accordingly, we record the costs of the United plan, including an estimate of the incurred claims, taxes and administrative fees (collectively the “Plan Costs”) as benefits expense in our Consolidated Statements of Operations. The estimated incurred claims are based upon: (i) the level of claims processed during the quarter; (ii) estimated completion rates based upon recent claim development patterns under the plan; and (iii) the number of participants in the plan, including both active and COBRA enrollees. Each reporting period, changes in the estimated ultimate costs resulting from claim trends, plan design and migration, participant demographics and other factors are incorporated into the benefits costs.

Additionally, since the plan’s inception, under the terms of the contract, United establishes cash funding rates 90 days in advance of the beginning of a reporting quarter. If the Plan Costs for a reporting quarter are greater than the premiums paid and owed to United, a deficit in the plan would be incurred and a liability for the excess costs would be accrued in our Consolidated Balance Sheets. On the other hand, if the Plan Costs for the reporting quarter are less than the premiums paid and owed to United, a surplus in the plan would be incurred and we would record an asset for the excess premiums in our Consolidated Balance Sheets. The terms of the arrangement require us to maintain an accumulated cash surplus in the plan of $9.0 million, which is reported as long-term prepaid insurance. In addition, United requires a deposit equal to approximately one day of claims funding activity, which was $4.5 million as of June 30, 2016, and is reported as a long-term asset. As of June 30, 2016, Plan Costs were less than the net premiums paid and owed to United by $22.9 million. As this amount is in excess of the agreed-upon $9.0 million surplus maintenance level, the $13.9 million difference is included in prepaid insurance, a current asset, in our Consolidated Balance Sheets. The premiums owed to United at June 30, 2016 were $23.0 million, which is included in accrued health insurance costs, a current liability in our Consolidated Balance Sheets. Our benefits costs incurred in the first six months of 2016 included costs of $3.7 million for changes in estimated run-off related to prior periods.

Workers’ Compensation Costs

Our workers’ compensation coverage has been provided through an arrangement with the Chubb Group of Insurance Companies (the “Chubb Program”) since 2007. The Chubb Program is fully insured in that Chubb has the responsibility to pay all claims incurred regardless of whether we satisfy our responsibilities. Under the Chubb Program, we bear the economic burden for the first $1 million layer of claims per occurrence, as well as a maximum aggregate amount of $5 million per policy year for claim amounts that exceed $1 million. Chubb bears the economic burden for all claims in excess of these levels.

Because we bear the economic burden 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 employ a third party actuary to estimate our loss development rate, which is primarily based upon the nature of worksite employees’ job responsibilities, the location of worksite employees, 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. 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 in both the 2016 period and the 2015 period was 1.0%) and are accreted over the estimated claim payment period and included as a component of direct costs in our Consolidated Statements of Operations.

The following table provides the activity and balances related to incurred but not paid workers’ compensation claims:

	Six Months Ended   June 30,
	2016			2015
	(in thousands)
Beginning balance, January 1,	$	162,184		$	136,088
Accrued claims	35,045			32,720
Present value discount	(1,274		)	(1,189		)
Paid claims	(19,038		)	(19,794		)
Ending balance	$	176,917		$	147,825
Current portion of accrued claims	$	41,236		$	48,887
Long-term portion of accrued claims	135,681			98,938
	$	176,917		$	147,825

The current portion of accrued workers’ compensation costs on our Consolidated Balance Sheets at June 30, 2016 includes $2.1 million of workers’ compensation administrative fees.

As of June 30, 2016 and 2015, the undiscounted accrued workers’ compensation costs were $187.0 million and $157.4 million, respectively.

At the beginning of each policy period, the workers’ compensation insurance carrier establishes monthly funding requirements comprised of premium costs and funds to be set aside for payment of future claims (“claim funds”). The level of claim funds is primarily based upon anticipated worksite employee payroll levels and expected workers’ compensation loss rates, as determined by the insurance carrier. Monies funded into the program for incurred claims expected to be paid within one year are recorded as restricted cash, a short-term asset, while the remainder of claim funds are included in deposits - workers’ compensation, a long-term asset in our Consolidated Balance Sheets. During the first six months of 2016, we

received $12.8 million for the return of excess claim funds related to the workers’ compensation program. This resulted in a net

decrease to deposits. As of June 30, 2016, we had restricted cash of $41.2 million and deposits - workers’ compensation of $130.7 million.

Our estimate of incurred claim costs expected to be paid within one year is included in short-term liabilities, while our estimate of incurred claim costs expected to be paid beyond one year is included in long-term liabilities on our Consolidated Balance Sheets.

New Accounting Pronouncements

We believe we have implemented the accounting pronouncements with a material impact on our financial statements and do not believe there are any new or pending pronouncements that will materially impact our financial position or results of operations, other than discussed below.

In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers (Topic 606). ASU No. 2014-09 outlines a single comprehensive revenue recognition model for revenue arising from contracts with customers and supersedes most current revenue recognition guidance, including industry-specific guidance. Under ASU No. 2014-09, an entity recognizes revenue for the transfer of promised goods or services to customers in an amount that reflects the consideration for which the entity expects to be entitled in exchange for those goods or services. ASU No. 2014-09 is effective for annual reporting periods ending after December 15, 2017, and early adoption is not permitted. Companies may use either a full retrospective or a modified retrospective approach to adopt ASU No. 2014-09. We are currently evaluating the guidance and have not determined the impact this standard may have on our Consolidated Financial Statements.

In April 2015, FASB issued ASU No. 2015-05, Intangibles—Goodwill and Other—Internal-Use Software providing guidance on the accounting for fees paid by a customer in a cloud computing arrangement, including whether a cloud computing arrangement includes a software license. If a cloud computing arrangement includes a software license, then the customer is required to account for the software license consistent with the acquisition of other software licenses. Conversely, if the arrangement does not include a software license, the customer should account for the arrangement as a service contract. The guidance is effective for fiscal years beginning after December 15, 2015. The adoption of this guidance did not have a material impact on our consolidated financial statements.

In February 2016, the FASB issued ASU No. 2016-02, Leases. The new standard requires recognition of lease assets and lease liabilities for leases previously classified as operating leases. The guidance is effective for fiscal years beginning after December 15, 2018. We are currently reviewing the guidance and assessing the impact on our consolidated financial statements.

In March 2016, the FASB issued ASU No. 2016-09, Compensation-Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting. The ASU includes multiple provisions intended to simplify various aspects of the accounting for share-based compensation payments, including (i) permitting the election of estimated or actual forfeitures for share grants, (ii) allowing excess tax benefits for share-based payments to be recorded as a reduction of income taxes reflected in operating cash flows in place of excess tax benefits currently recorded in equity and as financing activity in the cash flow statement, and (iii) providing for statutory withholding requirements. This guidance is effective for annual and interim reporting periods for public entities beginning after December 15, 2016; however, it can be elected early in any interim or annual period. We have elected to prospectively adopt this pronouncement for calendar year 2016, resulting in the recognition of an income tax benefit of $1.0 million, or $0.05 per diluted share in the first quarter of 2016 related to excess tax benefits from vesting of restricted stock awards. Prior to the adoption of this pronouncement excess tax benefits were required to be reported as an increase in additional paid in capital. Prior periods have not been adjusted.

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Cash, Cash Equivalents and Marketable Securities

6 Months Ended

Jun. 30, 2016

Cash, Cash Equivalents and Marketable Securities [Abstract]

Cash, Cash Equivalents and Marketable Securities

3. Cash, Cash Equivalents and Marketable Securities

The following table summarizes our cash and investments in cash equivalents and marketable securities held by investment managers and overnight investments:

	June 30, 2016			December 31, 2015
	(in thousands)
Overnight Holdings
Money market funds (cash equivalents)	$	233,080		$	247,720
Investment Holdings
Money market funds (cash equivalents)	24,010			26,048
Marketable securities	1,881			9,875
	258,971			283,643
Cash held in demand accounts	24,666			19,377
Outstanding checks	(10,183		)	(23,607		)
Total cash, cash equivalents and marketable securities	$	273,454		$	279,413
Cash and cash equivalents	$	271,573		$	269,538
Marketable securities	1,881			9,875
Total cash, cash equivalents and marketable securities	$	273,454		$	279,413

Our cash and overnight holdings fluctuate based on the timing of clients’ payroll processing cycles. Included in the cash, cash equivalents and marketable securities at June 30, 2016 and December 31, 2015, are $121.4 million and $185.7 million, respectively, of funds associated with federal and state income tax withholdings, employment taxes and other payroll deductions, as well as $100.7 million and $17.0 million in client prepayments, respectively.

We account for our financial assets in accordance with Accounting Standard Codification 820, Fair Value Measurement. This standard defines fair value, establishes a framework for measuring fair value and expands disclosures about fair value measurements. The fair value measurement disclosures are grouped into three levels based on valuation factors:

• Level 1 - quoted prices in active markets using identical assets

• Level 2 - significant other observable inputs, such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active, or other observable inputs

• Level 3 - significant unobservable inputs

The following table summarizes the levels of fair value measurements of our financial assets:

	Fair Value Measurements
	(in thousands)
	June 30, 2016		Level 1		Level 2		Level 3
Money market funds	$	257,090	$	257,090	$	—	$	—
Municipal bonds	1,881		—		1,881		—
Total	$	258,971	$	257,090	$	1,881	$	—

	Fair Value Measurements
	(in thousands)
	December 31, 2015		Level 1		Level 2		Level 3
Money market funds	$	273,768	$	273,768	$	—	$	—
Municipal bonds	9,875		—		9,875		—
Total	$	283,643	$	273,768	$	9,875	$	—

The municipal bond securities valued as Level 2 investments are primarily pre-refunded municipal bonds that are secured by escrow funds containing U.S. Government securities. Our valuation techniques used to measure fair value for these securities during the period consisted primarily of third party pricing services that utilized actual market data such as trades of comparable bond issues, broker/dealer quotations for the same or similar investments in active markets and other observable inputs.

The following is a summary of our available-for-sale marketable securities:

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Estimated Fair Value
			(in thousands)
June 30, 2016
Municipal bonds	$	1,879	$	2	$	—		$	1,881
December 31, 2015
Municipal bonds	$	9,875	$	3	$	(3	)	$	9,875

As of June 30, 2016, the contractual maturities of our marketable securities were as follows:

	Amortized Cost		Estimated Fair Value
	(in thousands)
Less than one year	$	1,351	$	1,351
One to five years	528		530
Total	$	1,879	$	1,881

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Impairment Charges and Other Impairment Charges and Other (Notes)

6 Months Ended

Jun. 30, 2016

Asset Impairment Charges [Abstract]

Asset Impairment Charges

4. Impairment Charges and Other

In the first quarter of 2015, we entered into a plan to sell our two aircraft, and as a result, we recorded impairment and other charges of $9.8 million, representing the difference between the carrying value and the estimated fair value of the assets as well as a provision for potential settlement of a Texas sales and use tax assessment. The fair value of assets held for sale of $13.5 million was determined based on the estimated selling price less costs incurred to sell and was classified as Level 2 in the fair value hierarchy. In July 2015, we received proceeds, net of selling costs, of $12.2 million for both aircraft and recorded an additional $1.3 million impairment charge in the second quarter of 2015.

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Long-term Debt

6 Months Ended

Jun. 30, 2016

Debt Disclosure [Abstract]

Revolving Credit Facility

5. Long-Term Debt

We have a revolving credit facility (the “Facility”), which was increased from $125 million to $200 million in the first quarter of 2016. The Facility may be further increased to $250 million based on the terms and subject to the conditions set forth in the agreement relating to the Facility (the “Credit Agreement”). The Facility is available for working capital and general corporate purposes, including acquisitions, stock repurchases and issuances of letters of credit. Our obligations under the Facility are secured by 65% of the stock of our captive insurance subsidiary and are guaranteed by all of our domestic subsidiaries. In January 2016, we had net borrowings of $104.4 million to fund a portion of the purchase price of our modified Dutch auction tender offer. In addition, as of June 30, 2016, we had an outstanding $1.0 million letter of credit issued under the Facility. As of June 30, 2016, our outstanding balance on the Facility was $104.4 million.

The Facility matures on February 6, 2020. Borrowings under the Facility bear interest at an alternate base rate or LIBOR, at our option, plus an applicable margin. Depending on our leverage ratio, the applicable margin varies (i) in the case of LIBOR loans, from 2.00% to 2.75% and (ii) in the case of alternate base rate loans, from 0.00% to 0.75%. The alternate base rate is the highest of (i) the prime rate most recently published in The Wall Street Journal, (ii) the federal funds rate plus 0.50% and (iii) the 30-day LIBOR rate plus 2.00%. We also pay an unused commitment fee on the average daily unused portion of the Facility at a rate of 0.25%. The interest rate at June 30, 2016 was 2.19%. Interest expense and unused commitment fees are recorded in other income (expense).

The Facility contains both affirmative and negative covenants that we believe are customary for arrangements of this nature. Covenants include, but are not limited to, limitations on our ability to incur additional indebtedness, sell material assets, retire, redeem or otherwise reacquire our capital stock, acquire the capital stock or assets of another business, make investments and pay dividends. In addition, the Credit Agreement requires us to comply with financial covenants limiting our total funded debt, minimum interest coverage ratio and maximum leverage ratio. We were in compliance with all financial covenants under the Credit Agreement at June 30, 2016.

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Stockholders' Equity

6 Months Ended

Jun. 30, 2016

Stockholders' Equity Note [Abstract]

Stockholders Equity

6. Stockholders' Equity

During the first six months of 2016, we repurchased or withheld an aggregate of 3.1 million shares of our common stock, as described below.

Tender Offer for Common Stock

In December 2015, we commenced a modified Dutch auction tender offer to purchase up to $125 million in value of our common stock at a price not less than $43.50 per share and not more than $50.00 per share. In January 2016, we exercised our right to increase the size of the tender offer by up to 2.0% of our outstanding common stock. The tender offer period expired on January 7, 2016 and on January 13, 2016, we purchased 3,013,531 shares of our common stock at a per share price of $47.50 and an aggregate price of $143.1 million, excluding $1.1 million of transaction costs. The shares were immediately canceled and retired.

The tender offer was funded through borrowings of $104.4 million under the Facility and the remainder with cash on hand.

Repurchase Program

Our Board of Directors (the “Board”) has authorized a program to repurchase shares of our outstanding common stock (“Repurchase Program”). The purchases are to be made from time to time in the open market or directly from stockholders at prevailing market prices based on market conditions and other factors. In May 2016, the Board increased the authorized number of shares to be repurchased under the Repurchase Program by one million. During the six months ended June 30, 2016, no shares were repurchased under the Repurchase Program. As of June 30, 2016, we were authorized to repurchase an additional 1,524,332 shares under the Repurchase Program.

Withheld Shares

During the six months ended, June 30, 2016, we withheld 100,595 shares to satisfy tax withholding obligations for the vesting of restricted stock awards.

Dividends

The Board declared quarterly dividends as follows:

	2016		2015
	(amounts per share)
First quarter	$	0.22	$	0.19
Second quarter	0.25		0.22

 During the six months ended June 30, 2016 and 2015, we paid dividends totaling $10.0 million and $10.4 million, respectively.

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Long-Term Incentive Program Long-Term Incentive Program (Notes)

6 Months Ended

Jun. 30, 2016

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Shareholders' Equity and Share-based Payments [Text Block]

7. Long-Term Incentive Program

On March 30, 2015, we adopted the Insperity, Inc. Long-Term Incentive Program (the “LTIP”) under the Insperity, Inc. 2012 Incentive Plan. The LTIP provides for performance-based long-term compensation awards in the form of performance units to certain employees based on the achievement of pre-established performance goals.

Each performance unit represents the right to receive one common share at a future date based on our performance against specified targets. Performance units have a vesting schedule of three years. The fair value of each performance unit is the market price of one common share on the date of grant in the case of performance condition awards. In the case of market condition awards, the fair value is determined using a Monte Carlo lattice model approach at the date of grant. The compensation expense for such awards is recognized on a straight-line basis over the vesting term. For performance condition awards, the number of shares expected to be issued is adjusted upward or downward based upon the probability of achievement of the performance targets.

The ultimate number of shares issued and the related compensation cost recognized is based on a comparison of the final performance metrics to the specified targets.

The following is a summary of LTIP award activity for 2016:

	Number of Performance Units at Target		Weighted Average Grant Date Fair Value		Maximum Shares Eligible to Receive
Unvested - December 31, 2015	100,900		$	52.80	183,401
Granted	118,525		59.13		237,050
Vested	—		—		—
Canceled	(2,550	)	52.80		(4,635	)
Unvested - June 30, 2016	216,875		56.26		415,816

As of June 30, 2016, we estimate 178,770 shares and 127,429 shares will vest with $5.4 million and $6.0 million in unamortized compensation expense related to the 2015 and 2016 grants, respectively.

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Net Income Per Share

6 Months Ended

Jun. 30, 2016

Earnings Per Share [Abstract]

Net Income per Share

8. Net Income per Share

We utilize the two-class method to compute net income per share. The two-class method allocates a portion of net income to participating securities, which include unvested awards of share-based payments with non-forfeitable rights to receive dividends. Net income allocated to unvested share-based payments is excluded from net income allocated to common shares. Any undistributed losses resulting from dividends exceeding net income are not allocated to participating securities. Basic net income per share is computed by dividing net income allocated to common shares by the weighted average number of common shares outstanding during the period. Diluted net income per share is computed by dividing net income allocated to common shares by the weighted average number of common shares outstanding during the period, plus the dilutive effect of outstanding stock options.

The following table summarizes the net income allocated to common shares and the basic and diluted shares used in the net income per share computations:

	Three Months Ended   June 30,						Six Months Ended   June 30,
	2016			2015			2016			2015
	(in thousands)
Net income	$	9,713		$	7,314		$	42,406		$	21,101
Less distributed and undistributed earnings allocated to participating securities	(229		)	(179		)	(962		)	(521		)
Net income allocated to common shares	$	9,484		$	7,135		$	41,444		$	20,580
Weighted average common shares outstanding	20,869			24,766			20,921			24,741
Incremental shares from assumed conversions of common stock options	15			7			10			8
Adjusted weighted average common shares outstanding	20,884			24,773			20,931			24,749

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Commitments and Contingencies

6 Months Ended

Jun. 30, 2016

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

9. Commitments and Contingencies

Worksite Employee 401(k) Retirement Plan Class Action Litigation

In December 2015, a class action lawsuit was filed against us and our third party discretionary trustee of the Insperity 401(k) retirement plan available to eligible worksite employees (the “Plan”) in the United States District Court for the Northern District of Georgia, Atlanta Division on behalf of Plan participants. This suit generally alleges that the Company’s third-party discretionary trustee of the Plan and Insperity breached their fiduciary duties to plan participants by selecting an Insperity subsidiary to serve as the recordkeeper for the Plan, by causing participants in the Plan to pay excessive recordkeeping fees to the Insperity subsidiary, by failing to monitor other fiduciaries and by making imprudent investment choices. We believe we have meritorious defenses and we intend to vigorously defend this litigation. As a result of uncertainty regarding the outcome of this matter, no provision has been made in the accompanying consolidated financial statements.

We are a defendant in various other lawsuits and claims arising in the normal course of business. Management believes it has valid defenses in these cases and is defending them vigorously. While the results of litigation cannot be predicted with certainty, management believes the final outcome of such litigation will not have a material adverse effect on our financial position or results of operations.

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Accounting Policies (Policies)

6 Months Ended

Jun. 30, 2016

Accounting Policies [Abstract]

New Accounting Pronouncements, Policy [Policy Text Block]

New Accounting Pronouncements

We believe we have implemented the accounting pronouncements with a material impact on our financial statements and do not believe there are any new or pending pronouncements that will materially impact our financial position or results of operations, other than discussed below.

In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers (Topic 606). ASU No. 2014-09 outlines a single comprehensive revenue recognition model for revenue arising from contracts with customers and supersedes most current revenue recognition guidance, including industry-specific guidance. Under ASU No. 2014-09, an entity recognizes revenue for the transfer of promised goods or services to customers in an amount that reflects the consideration for which the entity expects to be entitled in exchange for those goods or services. ASU No. 2014-09 is effective for annual reporting periods ending after December 15, 2017, and early adoption is not permitted. Companies may use either a full retrospective or a modified retrospective approach to adopt ASU No. 2014-09. We are currently evaluating the guidance and have not determined the impact this standard may have on our Consolidated Financial Statements.

In April 2015, FASB issued ASU No. 2015-05, Intangibles—Goodwill and Other—Internal-Use Software providing guidance on the accounting for fees paid by a customer in a cloud computing arrangement, including whether a cloud computing arrangement includes a software license. If a cloud computing arrangement includes a software license, then the customer is required to account for the software license consistent with the acquisition of other software licenses. Conversely, if the arrangement does not include a software license, the customer should account for the arrangement as a service contract. The guidance is effective for fiscal years beginning after December 15, 2015. The adoption of this guidance did not have a material impact on our consolidated financial statements.

In February 2016, the FASB issued ASU No. 2016-02, Leases. The new standard requires recognition of lease assets and lease liabilities for leases previously classified as operating leases. The guidance is effective for fiscal years beginning after December 15, 2018. We are currently reviewing the guidance and assessing the impact on our consolidated financial statements.

In March 2016, the FASB issued ASU No. 2016-09, Compensation-Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting. The ASU includes multiple provisions intended to simplify various aspects of the accounting for share-based compensation payments, including (i) permitting the election of estimated or actual forfeitures for share grants, (ii) allowing excess tax benefits for share-based payments to be recorded as a reduction of income taxes reflected in operating cash flows in place of excess tax benefits currently recorded in equity and as financing activity in the cash flow statement, and (iii) providing for statutory withholding requirements. This guidance is effective for annual and interim reporting periods for public entities beginning after December 15, 2016; however, it can be elected early in any interim or annual period. We have elected to prospectively adopt this pronouncement for calendar year 2016, resulting in the recognition of an income tax benefit of $1.0 million, or $0.05 per diluted share in the first quarter of 2016 related to excess tax benefits from vesting of restricted stock awards. Prior to the adoption of this pronouncement excess tax benefits were required to be reported as an increase in additional paid in capital. Prior periods have not been adjusted.

Health Insurance Costs

Health Insurance Costs

We provide group health insurance coverage to our worksite employees through a national network of carriers, including UnitedHealthcare (“United”), UnitedHealthcare of California, Kaiser Permanente, Blue Shield of California, HMSA BlueCross BlueShield, and Tufts, all of which provide fully insured policies or service contracts.

The policy with United provides the majority of our health insurance coverage. As a result of certain contractual terms, we have accounted for this plan since its inception using a partially self-funded insurance accounting model. Accordingly, we record the costs of the United plan, including an estimate of the incurred claims, taxes and administrative fees (collectively the “Plan Costs”) as benefits expense in our Consolidated Statements of Operations. The estimated incurred claims are based upon: (i) the level of claims processed during the quarter; (ii) estimated completion rates based upon recent claim development patterns under the plan; and (iii) the number of participants in the plan, including both active and COBRA enrollees. Each reporting period, changes in the estimated ultimate costs resulting from claim trends, plan design and migration, participant demographics and other factors are incorporated into the benefits costs.

Additionally, since the plan’s inception, under the terms of the contract, United establishes cash funding rates 90 days in advance of the beginning of a reporting quarter. If the Plan Costs for a reporting quarter are greater than the premiums paid and owed to United, a deficit in the plan would be incurred and a liability for the excess costs would be accrued in our Consolidated Balance Sheets. On the other hand, if the Plan Costs for the reporting quarter are less than the premiums paid and owed to United, a surplus in the plan would be incurred and we would record an asset for the excess premiums in our Consolidated Balance Sheets. The terms of the arrangement require us to maintain an accumulated cash surplus in the plan of $9.0 million, which is reported as long-term prepaid insurance. In addition, United requires a deposit equal to approximately one day of claims funding activity, which was $4.5 million as of June 30, 2016, and is reported as a long-term asset. As of June 30, 2016, Plan Costs were less than the net premiums paid and owed to United by $22.9 million. As this amount is in excess of the agreed-upon $9.0 million surplus maintenance level, the $13.9 million difference is included in prepaid insurance, a current asset, in our Consolidated Balance Sheets. The premiums owed to United at June 30, 2016 were $23.0 million, which is included in accrued health insurance costs, a current liability in our Consolidated Balance Sheets. Our benefits costs incurred in the first six months of 2016 included costs of $3.7 million for changes in estimated run-off related to prior periods.

Workers' Compensation Costs

Workers’ Compensation Costs

Our workers’ compensation coverage has been provided through an arrangement with the Chubb Group of Insurance Companies (the “Chubb Program”) since 2007. The Chubb Program is fully insured in that Chubb has the responsibility to pay all claims incurred regardless of whether we satisfy our responsibilities. Under the Chubb Program, we bear the economic burden for the first $1 million layer of claims per occurrence, as well as a maximum aggregate amount of $5 million per policy year for claim amounts that exceed $1 million. Chubb bears the economic burden for all claims in excess of these levels.

Because we bear the economic burden 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 employ a third party actuary to estimate our loss development rate, which is primarily based upon the nature of worksite employees’ job responsibilities, the location of worksite employees, 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. 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 in both the 2016 period and the 2015 period was 1.0%) and are accreted over the estimated claim payment period and included as a component of direct costs in our Consolidated Statements of Operations.

The following table provides the activity and balances related to incurred but not paid workers’ compensation claims:

	Six Months Ended   June 30,
	2016			2015
	(in thousands)
Beginning balance, January 1,	$	162,184		$	136,088
Accrued claims	35,045			32,720
Present value discount	(1,274		)	(1,189		)
Paid claims	(19,038		)	(19,794		)
Ending balance	$	176,917		$	147,825
Current portion of accrued claims	$	41,236		$	48,887
Long-term portion of accrued claims	135,681			98,938
	$	176,917		$	147,825

The current portion of accrued workers’ compensation costs on our Consolidated Balance Sheets at June 30, 2016 includes $2.1 million of workers’ compensation administrative fees.

As of June 30, 2016 and 2015, the undiscounted accrued workers’ compensation costs were $187.0 million and $157.4 million, respectively.

At the beginning of each policy period, the workers’ compensation insurance carrier establishes monthly funding requirements comprised of premium costs and funds to be set aside for payment of future claims (“claim funds”). The level of claim funds is primarily based upon anticipated worksite employee payroll levels and expected workers’ compensation loss rates, as determined by the insurance carrier. Monies funded into the program for incurred claims expected to be paid within one year are recorded as restricted cash, a short-term asset, while the remainder of claim funds are included in deposits - workers’ compensation, a long-term asset in our Consolidated Balance Sheets. During the first six months of 2016, we

received $12.8 million for the return of excess claim funds related to the workers’ compensation program. This resulted in a net

decrease to deposits. As of June 30, 2016, we had restricted cash of $41.2 million and deposits - workers’ compensation of $130.7 million.

Our estimate of incurred claim costs expected to be paid within one year is included in short-term liabilities, while our estimate of incurred claim costs expected to be paid beyond one year is included in long-term liabilities on our Consolidated Balance Sheets.

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Accounting Policies (Tables)

6 Months Ended

Jun. 30, 2016

Accounting Policies [Abstract]

Activity and balances related to incurred but not paid workers' compensation claims

The following table provides the activity and balances related to incurred but not paid workers’ compensation claims:

	Six Months Ended   June 30,
	2016			2015
	(in thousands)
Beginning balance, January 1,	$	162,184		$	136,088
Accrued claims	35,045			32,720
Present value discount	(1,274		)	(1,189		)
Paid claims	(19,038		)	(19,794		)
Ending balance	$	176,917		$	147,825
Current portion of accrued claims	$	41,236		$	48,887
Long-term portion of accrued claims	135,681			98,938
	$	176,917		$	147,825

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Cash, Cash Equivalents and Marketable Securities (Tables)

6 Months Ended

Jun. 30, 2016

Cash, Cash Equivalents and Marketable Securities [Abstract]

Summary of investments in cash, cash equivalents and marketable securities

The following table summarizes our cash and investments in cash equivalents and marketable securities held by investment managers and overnight investments:

	June 30, 2016			December 31, 2015
	(in thousands)
Overnight Holdings
Money market funds (cash equivalents)	$	233,080		$	247,720
Investment Holdings
Money market funds (cash equivalents)	24,010			26,048
Marketable securities	1,881			9,875
	258,971			283,643
Cash held in demand accounts	24,666			19,377
Outstanding checks	(10,183		)	(23,607		)
Total cash, cash equivalents and marketable securities	$	273,454		$	279,413
Cash and cash equivalents	$	271,573		$	269,538
Marketable securities	1,881			9,875
Total cash, cash equivalents and marketable securities	$	273,454		$	279,413

Summary of fair value measurements of financial assets

The following table summarizes the levels of fair value measurements of our financial assets:

	Fair Value Measurements
	(in thousands)
	June 30, 2016		Level 1		Level 2		Level 3
Money market funds	$	257,090	$	257,090	$	—	$	—
Municipal bonds	1,881		—		1,881		—
Total	$	258,971	$	257,090	$	1,881	$	—

	Fair Value Measurements
	(in thousands)
	December 31, 2015		Level 1		Level 2		Level 3
Money market funds	$	273,768	$	273,768	$	—	$	—
Municipal bonds	9,875		—		9,875		—
Total	$	283,643	$	273,768	$	9,875	$	—

Summary of available-for-sale securities

The following is a summary of our available-for-sale marketable securities:

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Estimated Fair Value
			(in thousands)
June 30, 2016
Municipal bonds	$	1,879	$	2	$	—		$	1,881
December 31, 2015
Municipal bonds	$	9,875	$	3	$	(3	)	$	9,875

Contractual maturities of marketable securities

As of June 30, 2016, the contractual maturities of our marketable securities were as follows:

	Amortized Cost		Estimated Fair Value
	(in thousands)
Less than one year	$	1,351	$	1,351
One to five years	528		530
Total	$	1,879	$	1,881

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Stockholders' Equity Stockholders' Equity (Tables)

6 Months Ended

Jun. 30, 2016

Stockholders' Equity Attributable to Parent [Abstract]

Quarterly dividends declared [Table Text Block]

The Board declared quarterly dividends as follows:

	2016		2015
	(amounts per share)
First quarter	$	0.22	$	0.19
Second quarter	0.25		0.22

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Long-Term Incentive Program Long-Term Incentive Program (Tables)

6 Months Ended

Jun. 30, 2016

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Share-based Compensation, Performance Shares Award Outstanding Activity [Table Text Block]

The following is a summary of LTIP award activity for 2016:

	Number of Performance Units at Target		Weighted Average Grant Date Fair Value		Maximum Shares Eligible to Receive
Unvested - December 31, 2015	100,900		$	52.80	183,401
Granted	118,525		59.13		237,050
Vested	—		—		—
Canceled	(2,550	)	52.80		(4,635	)
Unvested - June 30, 2016	216,875		56.26		415,816

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Net Income per Share (Tables)

6 Months Ended

Jun. 30, 2016

Earnings Per Share [Abstract]

Summary of the net income allocated to common shares and the basic and diluted shares used in the net income per share computations

The following table summarizes the net income allocated to common shares and the basic and diluted shares used in the net income per share computations:

	Three Months Ended   June 30,						Six Months Ended   June 30,
	2016			2015			2016			2015
	(in thousands)
Net income	$	9,713		$	7,314		$	42,406		$	21,101
Less distributed and undistributed earnings allocated to participating securities	(229		)	(179		)	(962		)	(521		)
Net income allocated to common shares	$	9,484		$	7,135		$	41,444		$	20,580
Weighted average common shares outstanding	20,869			24,766			20,921			24,741
Incremental shares from assumed conversions of common stock options	15			7			10			8
Adjusted weighted average common shares outstanding	20,884			24,773			20,931			24,749

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Accounting Policies (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended	6 Months Ended
	Mar. 31, 2016	Jun. 30, 2016	Jun. 30, 2015	Dec. 31, 2015	Oct. 01, 2010
Accounting Policies [Abstract]
Cumulative Effect of New Accounting Principle in Period of Adoption	$ 1,000
Health Insurance Costs [Abstract]
Number of days in advance of the beginning of a reporting quarter United establishes cash funding rates		90 days
Required accumulated cash surplus		$ 9,000		$ 9,000
Required deposit equal to approximately one day of claims funding activity		4,500
Amount which plan costs were less than the net premiums paid and owed		22,900
Accrued health insurance, current		13,900
Premiums owed to United		23,000
Benefits costs incurred related to run-off		$ 3,700
Workers' Compensation Costs [Abstract]
Company's maximum economic burden for the first layer of claims per occurrence					$ 1,000
Company's maximum aggregate economic burden for claims in excess of 1 million per policy year					$ 5,000
U.S. Treasury rates that correspond with the weighted average estimated claim payout period (in hundredths)		1.00%	1.00%
Incurred but not paid workers compensation liabilities [Abstract]
Beginning balance, January 1,	$ 162,184	$ 162,184	$ 136,088
Accrued claims		35,045	32,720
Present value discount		(1,274)	(1,189)
Paid claims		(19,038)	(19,794)
Ending balance		176,917	147,825
Current portion of accrued claims		41,236	48,887
Long-term portion of accrued claims		135,681	98,938	124,746
Workers compensation administrative fees accrued		2,100
Undiscounted accrued workers' compensation costs		$ 187,000	$ 157,400
Time period incurred claims expected to be paid recorded as restricted cash		1 year
Return of Excess Claim Funds Net of Additional Amounts Paid in Claim Funds for Prior Policy Years		$ 12,800
Time period incurred claims expected to be paid, included in deposits, a long-term asset		Greater than 1 year
Restricted cash - worker's compensation		$ 41,226		37,418
Deposits workers compensation		$ 130,731		$ 136,462
Time period estimate of incurred claim costs to be paid included in short-term liabilities		1 year
Time period incurred claims expected to be paid, included in long-term liabilities		Greater than 1 year
New Accounting Pronouncement or Change in Accounting Principle, Effect of Change on Diluted Earnings Per Share	$ 0.05

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Cash, Cash Equivalents and Marketable Securities (Details) - USD ($) $ in Thousands	6 Months Ended	12 Months Ended
	Jun. 30, 2016	Dec. 31, 2015	Jun. 30, 2015	Dec. 31, 2014
Overnight Holdings
Money market funds (cash equivalents)	$ 233,080	$ 247,720
Investment Holdings
Money market funds (cash equivalents)	24,010	26,048
Marketable securities	1,881	9,875
Total cash equivalents and marketable securities	258,971	283,643
Cash held in demand accounts	24,666	19,377
Outstanding checks	(10,183)	(23,607)
Total cash, cash equivalents and marketable securities	273,454	279,413
Cash and cash equivalents	271,573	269,538	$ 167,728	$ 276,456
Marketable securities	1,881	9,875
Withholding associated with federal and state income taxes, employment taxes and other payroll deductions included in cash balance	121,400	185,700
Client prepayments included in cash balance	100,700	17,000
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Money market funds	257,090	273,768
Municipal bonds	1,881	9,875
Total	258,971	283,643
Available-for-sale marketable securities [Abstract]
Amortized Cost	1,879	9,875
Gross Unrealized Gains	2	3
Gross Unrealized Losses	0	(3)
Municipal bonds	1,881	9,875
Contractual maturities amortized cost [Abstract]
Less than one year	1,351
One to five years	528
Amortized Cost	1,879	9,875
Contractual maturities estimated fair value [Abstract]
Less than one year	1,351
One to five years	530
Municipal bonds	1,881	9,875
Level 1 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Money market funds	257,090	273,768
Municipal bonds	0	0
Total	257,090	273,768
Available-for-sale marketable securities [Abstract]
Municipal bonds	0	0
Contractual maturities estimated fair value [Abstract]
Municipal bonds	0	0
Level 2 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Money market funds	0	0
Municipal bonds	1,881	9,875
Total	1,881	9,875
Available-for-sale marketable securities [Abstract]
Municipal bonds	1,881	9,875
Contractual maturities estimated fair value [Abstract]
Municipal bonds	1,881	9,875
Level 3 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Money market funds	0	0
Municipal bonds	0	0
Total	0	0
Available-for-sale marketable securities [Abstract]
Municipal bonds	0	0
Contractual maturities estimated fair value [Abstract]
Municipal bonds	$ 0	$ 0

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Impairment Charges and Other Impairment Charges and Other (Details) - USD ($) $ in Thousands	3 Months Ended				6 Months Ended
	Jun. 30, 2016	Sep. 30, 2015	Jun. 30, 2015	Mar. 31, 2015	Jun. 30, 2016	Jun. 30, 2015
Asset Impairment Charges [Abstract]
Impairment charges and other	$ 0		$ 1,313	$ 9,800	$ 0	$ 11,120
Assets Held-for-sale, Not Part of Disposal Group			$ 13,500			$ 13,500
Proceeds from sale of aircraft		$ 12,200

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Long-term Debt (Details) $ in Thousands	6 Months Ended
	Jun. 30, 2016 USD ($)	Dec. 31, 2015 USD ($)
Line of Credit Facility [Line Items]
Current borrowing capacity	$ 200,000	$ 125,000
Maximum borrowing capacity	$ 250,000
Percentage Of Subsidiary Stock Securing Debt	0.65
Line of Credit Facility, Unused Capacity, Commitment Fee Percentage	0.25%
Letters of Credit Outstanding, Amount	$ 1,000
Long-term debt	$ 104,400	$ 0
Applicable Margin Federal Funds Rate	0.50%
Applicable Margin 30 Day Libor	2.00%
Line of Credit Facility, Interest Rate During Period	2.19%
London Interbank Offered Rate (LIBOR) [Member] | Minimum [Member]
Line of Credit Facility [Line Items]
Debt Instrument, Basis Spread on Variable Rate	2.00%
London Interbank Offered Rate (LIBOR) [Member] | Maximum [Member]
Line of Credit Facility [Line Items]
Debt Instrument, Basis Spread on Variable Rate	2.75%
Base Rate [Member] | Minimum [Member]
Line of Credit Facility [Line Items]
Debt Instrument, Basis Spread on Variable Rate	0.00%
Base Rate [Member] | Maximum [Member]
Line of Credit Facility [Line Items]
Debt Instrument, Basis Spread on Variable Rate	0.75%

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Stockholders' Equity (Details) - USD ($) $ / shares in Units, $ in Thousands	1 Months Ended	3 Months Ended					6 Months Ended
	Jan. 07, 2016	Jun. 30, 2016	Mar. 31, 2016	Dec. 31, 2015	Jun. 30, 2015	Mar. 31, 2015	Jun. 30, 2016	Jun. 30, 2015
Class of Stock [Line Items]
Share Price	$ 47.50
Aggregate number of shares repurchased during the period							3,100,000
MaxAmountOfTenderOfferForRepurchaseOfShares				$ 125,000
Repurchase of common stock (shares)	3,013,531
payments for repurchase of common stock excluding transaction costs	$ 143,100
Transaction Costs Related to Tender Offer	$ 1,100
Long-term debt		$ 104,400		$ 0			$ 104,400
Stock Repurchase Program, Number of Shares Authorized to be Repurchased		1,000,000					1,000,000
Shares repurchased under the program (in shares)							0
Shares withheld for tax withholding obligations for the vesting of restricted stock awards (in shares)							100,595
Authorized to repurchased additional shares under repurchase program (in shares)		1,524,332					1,524,332
Dividends declared per share of common stock (in dollars per share)		$ 0.25	$ 0.22		$ 0.22	$ 0.19
Payments of Dividends							$ 9,997	$ 10,407
Minimum [Member]
Class of Stock [Line Items]
Share Price				$ 43.50
Maximum [Member]
Class of Stock [Line Items]
Share Price				$ 50.00

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Long-Term Incentive Program Long-Term Incentive Program (Details) $ / shares in Units, $ in Millions	6 Months Ended
	Jun. 30, 2016 USD ($) $ / shares shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period	3 years
Share-based Compensation Arrangement by Share-based Payment Award, Options, Nonvested, Weighted Average Grant Date Fair Value [Abstract]
Unvested - December 31, 2015 | $ / shares	$ 52.80
Granted | $ / shares	59.13
Vested | $ / shares	0.00
Canceled | $ / shares	52.80
Unvested - June 30, 2016 | $ / shares	$ 56.26
Maximum [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unvested - December 31, 2015	183,401
Granted	237,050
Vested	0
Canceled	(4,635)
Unvested - June 30, 2016	415,816
2015 LTIP Awards [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unamortized compensation expense | $	$ 5.4
Estimate of shares expected to vest	178,770
2016LTIPAwards [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unamortized compensation expense | $	$ 6.0
Estimate of shares expected to vest	127,429
Target [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unvested - December 31, 2015	100,900
Granted	118,525
Vested	0
Canceled	(2,550)
Unvested - June 30, 2016	216,875

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Net Income per Share (Details) - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Earnings Per Share [Abstract]
Net income	$ 9,713	$ 7,314	$ 42,406	$ 21,101
Less distributed and undistributed earnings allocated to participating securities	229	179	962	521
Net income allocated to common shares	$ 9,484	$ 7,135	$ 41,444	$ 20,580
Weighted average common shares outstanding (in shares)	20,869	24,766	20,921	24,741
Incremental shares from assumed conversions of common stock options (in shares)	15	7	10	8
Adjusted weighted average common shares outstanding (in shares)	20,884	24,773	20,931	24,749

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Commitments and Contingencies Commitments and Contingencies (Details)	6 Months Ended
	Jun. 30, 2016 USD ($)
Commitments and Contingencies Disclosure (Details) [Abstract]
Loss Contingency Accrual, Provision	$ 0