Accrued Workers' Compensation Costs

9 Months Ended

Sep. 30, 2022

The following table summarizes the accrued workers’ compensation cost activity for the three and nine months ended September 30, 2022 and 2021:


	Three Months Ended September 30,				Nine Months Ended September 30,
(in millions)	2022		2021		2022		2021
Total accrued costs, beginning of period	$	189	$	198	$	198	$	205
Incurred
Current year	18		16		51		49
Prior years	(3)		(3)		(23)		(18)
Total incurred	15		13		28		31
Paid
Current year	(4)		(3)		(6)		(6)
Prior years	(8)		(10)		(28)		(32)
Total paid	(12)		(13)		(34)		(38)
Total accrued costs, end of period	$	192	$	198	$	192	$	198

The following summarizes workers' compensation liabilities on the condensed consolidated balance sheets:


(in millions)	September 30, 2022		December 31, 2021
Total accrued costs, end of period	$	192	$	198
Collateral paid to carriers and offset against accrued costs	(8)		(8)
Total accrued costs, net of carrier collateral offset	$	184	$	190

Payable in less than 1 year (net of collateral paid to carriers of $2 at September 30, 2022 and December 31, 2021, respectively)	$	55	$	55
Payable in more than 1 year (net of collateral paid to carriers of $6 at September 30, 2022 and December 31, 2021, respectively)	129		135
Total accrued costs, net of carrier collateral offset	$	184	$	190

Incurred losses related to prior years represents changes in estimates for ultimate losses on workers' compensation claims. For the three and nine months ended September 30, 2022, the favorable development is due to lower than expected development on the average size of reported claims.

As of September 30, 2022 and December 31, 2021, we had $43 million for both periods of collateral held by insurance carriers of which $8 million for both periods was offset against accrued workers' compensation costs as the agreements permit and are net settled of insurance obligations against collateral held.