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HomeMy WebLinkAboutItem 2g - Third Party Administrator for Liability and Workers' Compensation Claimsm<o~po~N~.a 1 .1 uNU.t lYV1 ~~++nity of STAFF REPORT Administrative Services Department DATE: August 18, 2009 TO: Mayor and City Council FROM: Hue C. Quach, Administrative Services Director Prepared by: Michael A. Casalou, Human Resources Administrator SUBJECT: Agreements for Third Party Administrator Services for Liability Workers' Compensation Claims Recommendation: Authorize the City Manager to extend the agreements with AdminSure for Third Party Administrator Services in the amount of $96,780.00 SUMMARY Staff is recommending the City Council authorize the City Manager to extend the agreements for Third Party Administrator Services with AdminSure. BACKGROUND The City of Arcadia operates a self-funded workers' compensation insurance and liability program and requires the services of a third party administrator to handle the day to day operations of the City's systems. AdminSure (formally known as Colen and Lee) has successfully administered the City's programs since 1985. Scope of services for the workers' compensation program include tracking claim information, setting and updating reserves, arranging for investigations, medical treatment, monitoring disability status, and auditing and paying medical bills. Further, AdminSure ensures that the City maintains compliance with the requirements of changing workers' compensation law. In-house staff does not have the capacity or the expertise to properly manage this program. As a result, the City has always contracted for this professional service. As with workers' compensation, the City's liability program has also been handled by AdminSure. Scope of services for liability include screening accident reports, establishing files and setting reserves on new cases, maintain contact with claimants or their attorneys, determine fault, evaluating damages and recommending settlement value, negotiating settlements and initiating payment of settlements and expenses and litigation management. Mayor and City Council August 18, 2009 Page 2 of 2 DISCUSSION A contract renewal was completed in 1990 for liability third party administration and 1997 for workers' compensation administration. The term for both agreements with AdminSure continues in effect until terminated by the cancellation provisions in the contracts. Since it has been a number of years utilizing the same vendor for this professional service, staff anticipates requesting bids in the 2009-10 fiscal year. Until then, it is recommended the City Council authorize a contract extension with AdminSure for these services. FISCAL IMPACT The fees charged by Adminsure for Liability Administration have only increased by 5% since 1991 (currently $1,627.50/month) and Workers' Compensation Administration fees (currently $6,437.50/month) have only increased by 3% since 2003. The annual fees remain unchanged for fiscal year 2009-10 for a total cost of $96,780.00. Adequate funds are budgeted in the 2009-10 Budget for these services. RECOMMENDATION It is recommended that the City Council: Authorize the City Manager to extend the agreements with AdminSure for Third Party Administrator Services for Liability and Workers' Compensation claims in the amount of $96,780.00. APPROVED: Donald Penman, City Manager