The following table summarizes the accrued workers’ compensation cost activity for the three and nine months ended September 30, 2026 and 2025:


	Three Months Ended September 30,				Nine Months Ended September 30,
(in millions)	2026		2025		2026		2025
Total accrued costs, beginning of period	$	149	$	158	$	151	$	158
Incurred
Current year	8		9		36		40
Prior years	3		2		(5)		(6)
Total incurred	11		11		31		34
Paid
Current year	(3)		(3)		(5)		(5)
Prior years	(9)		(7)		(29)		(28)
Total paid	(12)		(10)		(34)		(33)
Total accrued costs, end of period	$	148	$	159	$	148	$	159


(in millions)	September 30, 2026		December 31, 2025
Total accrued costs, end of period	$	148	$	151
Collateral paid to carriers and offset against accrued costs	(3)		(3)
Total accrued costs, net of carrier collateral offset	$	145	$	148

Payable in less than 1 year (net of collateral paid to carriers of $1 at September 30, 2026 and December 31, 2025)	42		42
Payable in more than 1 year (net of collateral paid to carriers of $2 at September 30, 2026 and December 31, 2025)	103		106
Total accrued costs, net of carrier collateral offset	$	145	$	148

Incurred losses related to prior years represent changes in estimates for ultimate losses on workers' compensation claims. For the three and nine months ended September 30, 2026, the favorable development is driven by lower than expected development on the average size of reported claims.

As of September 30, 2026 and December 31, 2025, we had $24 million and $25 million of collateral held by insurance carriers, of which $3 million and $3 million was offset against accrued workers' compensation costs as the agreements permit and are net settled of insurance obligations against collateral held.