(15) Commitments and Contingencies Loss Reserves For Certain Self-Insured Programs General and Professional Liability and Workers Compensation The Company self-insures for certain insurable risks, including general and professional liabilities and workers compensation liabilities through the use of self-insurance or retrospective and self-funded insurance policies and other hybrid policies, which vary among states in which the Company operates, including wholly owned captive insurance subsidiaries, to provide for potential liabilities for general and professional liability claims and workers compensation claims. Policies are typically written for a duration of 12 months and are measured on a claims made basis. Regarding workers compensation, the Company self-insures to its deductible and purchases statutorily required insurance coverage in excess of its deductible. There is a risk that amounts funded by the Companys self-insurance programs may not be sufficient to respond to all claims asserted under those programs. Insurance reserves represent estimates of future claims payments. This liability includes an estimate of the development of reported losses and losses incurred but not reported. Provisions for changes in insurance reserves are made in the period of the related coverage. The Company also considers amounts that may be recovered from excess insurance carriers in estimating the ultimate net liability for such risks. The Companys management employs its judgment and periodic independent actuarial analysis in determining the adequacy of certain self-insured workers compensation and general and professional liability obligations recorded as liabilities in the Companys financial statements. The Company evaluates the adequacy of its self-insurance reserves on a semi-annual basis or more frequently when it is aware of changes to its incurred loss patterns that could impact the accuracy of those reserves. The methods of making such estimates and establishing the resulting reserves are reviewed periodically and are based on historical paid claims information and nationwide nursing home trends. The foundation for most of these methods is the Companys actual historical reported and/or paid loss data. Any adjustments resulting therefrom are reflected in current earnings. Claims are paid over varying periods, and future payments may be different than the estimated reserves. The Company utilizes a combination of third-party administrators (TPAs), in-house adjusters, and legal counsel, along with systems designed to maintain and process claims, to provide it with the data utilized in its assessments of reserve adequacy. Where TPAs are utilized, they operate under the oversight of the Companys in-house risk management and legal functions. These functions and systems ensure that the claims are properly administered so that the historical data is reliable for estimation purposes. Case reserves, which are approved by the Companys legal and risk management departments, are determined based on an estimate of the ultimate settlement and/or ultimate loss exposure of individual claims. The reserves for loss for workers compensation risks are discounted based on actuarial estimates of claim payment patterns using a discount rate for the current policy year of 1.8%. The discount rates are based upon the risk-free rate for the appropriate duration for the respective policy year. The removal of discounting would have resulted in an increased reserve for workers compensation risks of $9.5 million and $8.3 million as of June 30, 2019 and December 31, 2018, respectively. The reserves for general and professional liability are recorded on an undiscounted basis. For the three months ended June 30, 2019 and 2018, the provision for general and professional liability risk totaled $5.4 million and $26.0, respectively. For the six months ended June 30, 2019 and 2018, the provision for general and professional liability risk totaled $26.8 million and $54.2 million, respectively. The reduction in the provision for general and professional liability for the three and six months ended June 30, 2019 is the result of favorable prior year claim development and lower current year loss exposures. The favorable development is due to the combination of the ongoing impact of tort reform, claim settlements, and other risk management initiatives. The reserves for general and professional liability were $402.2 million and $435.3 million as of June 30, 2019 and December 31, 2018, respectively. For the three months ended, June 30, 2019, and 2018, the provision for workers compensation risk totaled $13.4 million and $11.1 million, respectively. For the six months ended June 30, 2019 and 2018, the provision for workers compensation risk totaled $28.6 million and $26.4 million, respectively. The reserves for workers compensation risks were $170.8 million and $168.3 million as of June 30, 2019 and December 31, 2018, respectively. Health Insurance The Company offers employees an option to participate in self-insured health plans. Health insurance claims are paid as they are submitted to the plans administrators. The Company maintains an accrual for claims that have been incurred but not yet reported to the plans administrators and therefore have not yet been paid. This accrual for incurred but not yet reported claims was $15.3 million and $16.6 million as of June 30, 2019 and December 31, 2018, respectively. The liability for the self-insured health plan is recorded in accrued compensation in the consolidated balance sheets. Although management believes that the amounts provided in the Companys consolidated financial statements are adequate and reasonable, there can be no assurances that the ultimate liability for such self-insured risks will not exceed managements estimates. Legal Proceedings The Company and certain of its subsidiaries are involved in various litigation and regulatory investigations arising in the ordinary course of business. While there can be no assurance, based on the Companys evaluation of information currently available, management does not believe the results of such litigation and regulatory investigations would have a material adverse effect on the results of operations, financial position or cash flows of the Company. However, the Companys assessment of materiality may be affected by limited information (particularly in the early stages of government investigations). Accordingly, the Companys assessment of materiality may change in the future based upon availability of discovery and further developments in the proceedings at issue. The results of legal proceedings are inherently uncertain, and material adverse outcomes are possible. From time to time the Company may enter into confidential discussions regarding the potential settlement of pending investigations or litigation. There are a variety of factors that influence the Companys decisions to settle and the amount it may choose to pay, including the strength of the Companys case, developments in the investigation or litigation, the behavior of other interested parties, the demand on management time and the possible distraction of the Companys employees associated with the case and/or the possibility that the Company may be subject to an injunction or other equitable remedy. The settlement of any pending investigation, litigation or other proceedings could require the Company to make substantial settlement payments and result in its incurring substantial costs.