WORKERS’ COMPENSATION INSURANCE AND RESERVES

We provide workers’ compensation insurance for our temporary 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.

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 1.9% and 1.8% at April 1, 2018 and December 31, 2017, respectively. Payments made against self-insured claims are made over a weighted average period of approximately five years as of April 1, 2018.

The table below presents a reconciliation of the undiscounted workers’ compensation reserve to the discounted workers’ compensation reserve for the periods presented as follows:



(in thousands)	April 1, 2018		December 31, 2017
Undiscounted workers’ compensation reserve	$	288,942	$	293,600
Less discount on workers’ compensation reserve	19,198		19,277
Workers’ compensation reserve, net of discount	269,744		274,323
Less current portion	75,692		77,218
Long-term portion	$	194,052	$	197,105

Payments made against self-insured claims were $17.2 million and $15.9 million for the thirteen weeks ended April 1, 2018 and April 2, 2017, 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. At April 1, 2018 and December 31, 2017, the weighted average rate was 2.5%. The claim payments are made and the corresponding reimbursements from our insurance carriers are received over an estimated weighted average period of approximately 15 years. The discounted workers’ compensation reserve for excess claims was $48.5 million and $48.8 million as of April 1, 2018 and December 31, 2017, respectively. The discounted receivables from insurance companies, net of valuation allowance, were $44.6 million and $45.0 million as of April 1, 2018 and December 31, 2017, respectively, and are included in other assets, net on the accompanying Consolidated Balance Sheets.

Workers’ compensation expense of $16.6 million and $19.8 million was recorded in cost of services for the thirteen weeks ended April 1, 2018 and April 2, 2017, respectively.