XML 20 R10.htm IDEA: XBRL DOCUMENT v3.22.2
WORKERS' COMPENSATION INSURANCE AND RESERVES
 6 Months Ended
Jun. 26, 2022
Workers' Compensation Insurance and Reserves [Abstract]  
WORKERS' COMPENSATION INSURANCE AND RESERVES WORKERS' COMPENSATION INSURANCE AND RESERVES
We provide workers’ compensation insurance for our associates and permanent employees. The majority of our current workers’ compensation insurance policies cover claims for a particular event above a $2.0 million deductible limit, on a “per occurrence” basis. This results in our being substantially self-insured. Effective July 1, 2022, we have increased our deductible limit to $5.0 million on a “per occurrence” basis.
Our workers’ compensation reserve for claims below the deductible limit is discounted to its estimated net present value using discount rates based on average returns of “risk-free” U.S. Treasury instruments available during the year in which the liability was incurred. The weighted average discount rate was 1.6% at June 26, 2022 and December 26, 2021. Payments made against self-insured claims are made over a weighted average period of approximately 5.5 years as of June 26, 2022.
The following table presents a reconciliation of the undiscounted workers’ compensation reserve to the discounted workers’ compensation reserve for the periods presented:
(in thousands)June 26,
2022		December 26,
2021
Undiscounted workers’ compensation reserve$284,051 $273,000 
Less discount on workers’ compensation reserve16,453 16,806 
Workers’ compensation reserve, net of discount267,598 256,194 
Less current portion56,024 61,596 
Long-term portion$211,574 $194,598 
Payments made against self-insured claims were $21.5 million and $22.4 million for the twenty-six weeks ended June 26, 2022 and June 27, 2021, respectively.
Our workers’ compensation reserve includes estimated expenses related to claims above our self-insured limits (“excess claims”), and we record a corresponding receivable for the insurance coverage on excess claims based on the contractual policy agreements we have with insurance carriers. We discount this reserve and corresponding receivable to its estimated net present value using the discount rates based on average returns of “risk-free” U.S. Treasury instruments available during the year in which the liability was incurred. The rates used to discount excess claims incurred during the twenty-six weeks ended June 26, 2022 and fifty-two weeks ended December 26, 2021 were 2.1% and 1.8%, respectively. The claim payments are made and the corresponding reimbursements from our insurance carriers are received over an estimated weighted average period of approximately 17 years. The discounted workers’ compensation reserve for excess claims was $80.0 million and $62.7 million, as of June 26, 2022 and December 26, 2021, respectively. The discounted receivables from insurance companies, net of valuation allowance, were $78.6 million and $61.4 million as of June 26, 2022 and December 26, 2021, respectively.
Workers’ compensation cost consists primarily of changes in self-insurance reserves net of changes in discount, monopolistic jurisdictions’ premiums, insurance premiums and other miscellaneous expenses. Workers’ compensation cost of $9.8 million and $9.3 million was recorded in cost of services on our Consolidated Statements of Operations and Comprehensive Income for the thirteen weeks ended June 26, 2022 and June 27, 2021, respectively, and $21.1 million and $19.4 million for the twenty-six weeks ended June 26, 2022 and June 27, 2021, respectively.