Accrued Workers' Compensation Costs

9 Months Ended

Sep. 30, 2021

The following table summarizes the accrued workers’ compensation cost activity for the three and nine months ended September 30, 2021 and 2020:


	Three Months Ended September 30,				Nine Months Ended September 30,
(in millions)	2021		2020		2021		2020
Total accrued costs, beginning of period	$	198	$	211	$	205	$	214
Incurred
Current year	16		15		49		48
Prior years	(3)		(3)		(18)		(12)
Total incurred	13		12		31		36
Paid
Current year	(3)		(2)		(6)		(5)
Prior years	(10)		(11)		(32)		(35)
Total paid	(13)		(13)		(38)		(40)
Total accrued costs, end of period	$	198	$	210	$	198	$	210

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


(in millions)	September 30, 2021		December 31, 2020
Total accrued costs, end of period	$	198	$	205
Collateral paid to carriers and offset against accrued costs	(7)		(8)
Total accrued costs, net of carrier collateral offset	$	191	$	197

Payable in less than 1 year (net of collateral paid to carriers of $2 and $3 at September 30, 2021 and December 31, 2020, respectively)	$	54	$	59
Payable in more than 1 year (net of collateral paid to carriers of $5 and $5 at September 30, 2021 and December 31, 2020, respectively)	137		138
Total accrued costs, net of carrier collateral offset	$	191	$	197

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, 2021, the favorable development is due to lower than expected reported claim frequency and severity for the more recent years.

As of September 30, 2021 and December 31, 2020, we had $43 million and $45 million, respectively, of collateral held by insurance carriers of which $7 million and $8 million, respectively, was offset against accrued workers' compensation costs as the agreements permit and are net settled of insurance obligations against collateral held.