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HomeMy WebLinkAbout1981-06-23; City Council; 6645; Worker compensation administration servicesCITY OF CARLSBAD AGENDA BILL NO. __j>£1^O .'. . ' : Initial: DATE: - -JUNE'*5h 1981 V DEPARTMENT: CIT¥ MANAGER /^_^^ c. Mgr, Subject: . . AGREEMENT,FOR WORKER .COMPENSATION CLAIM . , . . ADMINISTRATION SERVICES ' . ' . . '•.-.'-".• Statement of the Matter , . On April 21, 1981, Council authorized staff to notify the city's current workers' compensation claim administrators > R.'.L. Kautz and Company, of the city's intention to cancel their present agreement effective .July •••!,. 1981. Subsequent efforts to renegotiate the agreement w-ith .terms acceptable to the city have proved unsuccessful. Accordingly, proposals have been sought from other service companies. Seven firms responded and their proposals were graded based on cost, municipal claims experience, staff qualifications and the. level of services available. The three receiving the highest grades were ; v interviewed by a panel consisting of the Assistant City Manager of . . • Administration, the Purchasing Officer,the Personnel Director and the City's Risk Management ConsultanJ;..__B4ised_^pon_^i.s_pjrjpcess and a ..': careful check of references (( .Fleming''" •»-----••'-"•'-'*-•- - ^ • was selected to be the best qualified to: F i s ca1 Impac t: . . _ Changing from R. L. Kautz to (__._F]^ejming,A_&l_A_ss:ociates. will result in an annual fee reduction of approximately $11,000. Exhibits: . . ' . •- ' : .....' • : , • ' ',- / 1.. Resolution No. A>"*7:V- ... . ... '.' ' 2- Agreement for Workers' Compensation- Claim Administration Services. . Recommendation: .Approve Resolution No. &>$~9S^ :- .authorizing agree- ment with Fleming & Associates for Workers' Com- - pensation Claims Administration Services.: APPROVED JL 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 IV 18 19 20 21 22 23 25 26 27 RESOLUTION NO.' 6595 f ' - . A RESOLUTION OP THE CITY COUNCIL -OF THE CITY OF . CARLSBAD, CALIFORNIA APPROVING AN AGREEMENT WITH FLEMING & ASSOCIATES FOR WORKERS' COMPENSATION CLAIMS ADMINISTRATION SERVICES. WHEREAS, the City of Carlsbad has established a workers' compensation self-insurance, program; and WHEREAS, as part of this program the City will require claims administration services; and WHEREAS, the City has received and evaluated proposals from various firms to supply such service. NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Carlsbad as follows: • •'•'.• 1. That the above recitations are' true and correct. 2. That the Agreement between the City of Carlsbad and Fleming & Associates for claims administration services, attached hereto as Exhibit A is hereby approved. .3. That the City Manager is hereby authorized to sign the agreement on behalf of the City. PASSED, APPROVED AND ADOPTED at a regular meeting of the City Council on the 23rd day of June' 1981 by the following vote, to wit: AYES: Council Members Packard, Casler, Anear, Lewis and Kulchin NOES: None ABSENT: None RONALD C. PACKARD, Mayor ATTEST: AL£THA L. RXUTENKRANZ, City Clerk R. STEVENS, Deputy City Clerk AGREEMENT BETWEEN THE CITY OF CARLSBAD AND FLEMING & ASSOCIATES FOR SUPERVISION AND ADMINISTRATION OF CITY'S WORKERS'^ COMPENSATION PROGRAM. - • . - - THIS AGREEMENT is entered'into in the City of Carlsbad between the City of Carlsbad/ (hereinafter "CITY") and Ed Fleming Company Inc., doing business as Fleming & Associates (hereinafter "SERVICE AGENT.") • '••:'' --. . .: ,::. : •" •• '••''-- "' •' •'•''• RECITALS • ' '.'• , .*'''''/V'..'^ :'-'X-:': "' •''•."••'.'"'• WHEREAS, SERVICE AGENT is engaged in the supervision and administration of programs for self-insured employers; and WHEREAS, for and in consideration of the mutual obli- gations hereby assumed, and the performance of the acts herein- ' after' set forth: '•,.' • ' •.. •,•• . '•. ' '/.-'-;:'•'K'"-;'•'"'••' '•"'..:''v'-: •": "• '• :; :'': : ' NOW, THEREFORE, the parties hereto agree as follov/s: 1. SCOPE OF SERVICES; SERVICE AGENT agrees to super- vise and administer the self-insurance program of the CITY, to act as the representative of the CITY in matters related to the- CITY'S obligation under the Workers Compensation Laws of the State of California, and agrees further to provide to the CITY during the term of this—Agreement all the services more particularly set forth hereinafter; • 2. TERM: This Agreement shall take effect at 12:01 a.m. July 1, 1981 and shall continue in effect until July 1, 1983, after which date this Agreement shall continue in effect until cancelled as hereinafter provided. 3. COMPENSATION: . • . The CITY shall pay ..the sum of One Hundred and ten } • ' ' . - Dollars ($110.00) for each employee claiming Workers' Compensation, bene'fits as a result of any one accident occurring during the time this Agreement is in effect, said amounts shall be billed and paid to Service Agent quarterly, based on the number of such claims recorded on Service Agent's statistical runs, as may be agreed by 'the City, commencing October 1, 1981. In addition, the City shall pay the sum of $85 for each employee claiming Workers' Compensation benefits as a result of .any accident occurring prior to July 1, 1981, whose claim has not been concluded, or could not have been concluded as a result of due diligence on the part of Service Agent prior to August I/ 1981, Said amount shall be billed and paid to Service Agent as soon as practical after August 1, 1981. ;4. COMPLIANCE WITH LAWS: • • ;.••,: SERVICE AGENT agrees that its administration of the self-insurance plan of the CITY shall be in complete compliance with all laws, rules and regulations governing the administration of self-insurance including but not limited to Sections 3700, et seg.- o*f the Labor Code and the California Administrative Procedure _,^sf-"** '• . Act as set forth in Government Code Sections 11370-11528 and any other applicable laws that shall apply during the period this Agreement is in effect. - ' • , 5. CLAIMS ADMINISTRATION: SERVICE AGENT agrees to perform the following services 1 ' in the administration of claims; A. Assign Nona Fals-Grancell as principal account examiner to the City to provide liaison between City and Service Agent. The assignment of Nona Fals-Grancell as principal account examiner to the City is a material con- sideration in City employing Service Agent, and assignment of -another examiner to City by Service Agent without prior approval by City will constiture a material breach of this Agreement, for which City can terminate immediately., B. Prepare and submit an operating manual of procedure for the CITY for the reporting of claims to SERVICE AGENT, said manual to cover in detail with specific instructions the responsibilities and procedures to be followed by CITY in handling employee on-the-job injuries of any nature and the names of SERVICE AGENT'S key personnel handling''CITY'S . accounts. ' .." ' •••'.. . . vvv •. :'••• •-;'.-. ' •; ., ..,'•'.".:- C. Establish and maintain in SERVICE AGENT'S offices for a period of five (5) years, all records and files on each of CITY'S reportable employee injuires and complete accounting records in connection with each reported case. Said files and records shall be the property of CITY and subject to CITY'S inspection at any time. Said files and documents will be delivered to CITY in the event a new plan for handling Workers^Compensation is developed by the CITY. Such-records shall not be disposed of or destroyed without prior authorization of CITY. D. Determine th© injured employee's correct average earnings to compute various weekly compensation rates and compute and pay all required compensation benefits and medical benefits from funds provided for that purpose. -3- E. Review, compute and authorize payment of temporary disability and permanent disability benefits due injured employees, and to pay voluntarily, or under Decisions, Orders, . or Findings and Awards of the Workers Compensation Appeals Board, and will give the CITY informal advisory ratings and consulting evaluations in cases involving permanent disability. F. Determine and calculate any possible life/pension involvement, evaluating factors of injury, occupation, age, subject complaints and general physical condition, using currently acceptable actuarial methods. G. Notify CITY'S Excess Reinsurance Carrier on behalf of the self-insurer of all claims' which may exceed CITY'S retention and maintain records and effect collection on all cases wherein CITY is entitled to reimbursement for a loss in excess of its '..•"•retention. • / . • •.•'•..;:"••':•'•;/• '-• •'• '"••'•"".'• '• V -;'V ."•'.". '••• :'':--:'-.: ''''-:.•' H. Maintain all payroll and loss records as required the California Inspection Rating Bureau. I. ^Determine liability of questionable claims in CITY's behalf, including necessary investigation, if required, to affirm that injury did or did not arise out of or during the course of and scope of employment. "On serious cases ,,.,..'... of a questionable nature, where additional investigation is deemed necessary, assignments will be made to an independent adjustment firm. Payment of services will be made from the loss fund and handled as an allocated expense. J. Review and report to the Rehabilitation Bureau of the Division of Industrial Accidents those case that my require vocational rehabilitation under the Vocational .'.'• ''" • . .' - ,'•••• ' ' ' : ' • --4- " • v ''• ' ''.. '' • -". ' •' • ' '•••' '• Rehabilitation Act. Develop and monitor closely plans which are submitted to the Rehabilitation Bureau for Vocational Rehabilitation. .-..':. ' 6. MEDICAL ADMINISTRATION: : SERVICE AGENT agrees to perform the following services in the administration of the medical aspects of claims: A. , Provide a panel of selected physicians or medical .specialists to which injured employees shall be referred when their injury so requires. The panel will be reviewed annually by SERVICE AGENT and CITY. B. Provide continuing medical control/ supervision and management of employee injury cases so that each employee shall have all necessary care and treatment and will be returned to his . job when his medical condition permits. C. Authorize hospitalization, surgery, and all other types of treatment as required after determination of liability in conformance with Labor Code Sections 4600 and 4601. D. Obtain and evaluate medical expert opinion as to the nature, extent and duration of temporary disability of each employee and the amount of residual permanent disability, if any, to be expected. , . • ' E. Provide and maintain a panel of qualified physicians "*- 'for treatment of disabled employees as is reasonably required to cure or relieve the effects of the injury. Should employee not progress adequately from a medical standpoint, SERVICE AGENT shall refer the employee to specialists in the field of medicine as indicated. . : -5- F. Arrange medical care so that .all billings for treatment shall be made to SERVICE AGENT for auditing and processing for payment. G. Review, audit, compute and authorize payment of all medical billings in accordance with the Recommended Minimum Fee'Schedule as set forth by the State Division of Industrial '. : -" Accidents. • • . .- . • /•, / . . / ;, .; .. •. • • • .' • ' ' '.-."'"':,.'.• y. •.•',• H. Complete administration and processing of any life- • time medical cases awarded or ordered by the Workers Compen- •'".•' ' , - _ " , • . j y » • • sation Appeals Board. . ^ I. Provide guidance in the evaluation of physical capa- . city or injured employees to return to work. J. Assist in the development of medical standards and health requirements for all jobs, and incorporate such standards ~ in a program of pre-employment and periodic examination. ."•"• 7 • LEGAL ADMINISTRATION; .•••;•"' ; V', ;A: • y SERVICE AGENT agrees to provide the following services in the legal administration of claims; ,.'. A. On the application of an injured employee for a hearing "before the Workers Compensation Appeals Board, SERVICE AGENT shall'where necessary ±efer the claim to an attorney retained . .. ,... by—tha~'City for the purpose of defending Workers Compensation..-^''ss"~ - .. ' ' . . claims.. Said legal counsel shall be acceptable to and approved by City Attorney of City in advance of retention by SERVICE AGENT» B.. SERVICE AGENT shall confer as is necessary with CITY and the attorneys during all stages of any legal'proceedings to insure that all facts and investigations necessary will be available and timely. On serious cases of questionable nature, where additional investigation is deemed necessary, assignments a ' • .''••'•«•» r\ — . • . . - will be made to an independent adjusting firm. Payment of the services will be made from a loss fund and handled as an allocated expense. C. SERVICE AGENT shall protect and preserve the interests of CITY and supervise the legal aspects of its obligations to its injured employees. SERVICE AGENT shall protect the CITY'S interests in all third party cases whereever indicated^ including filing of subrogation claims, and liens where appropriate, with approval of the City Attorney. . D. Inform the City Manager or his designee of any current changes in the law, in procedures, or of Appeals Board or Court decisions which might affect CITY'S interests. E. SERVICE AGENT shall prepare and file all reports in the name of CITY which CITY is required to file, now or in the future, with the State of California or other bodies as to claim reserves, accident statistics, and other documents. ;. F. SERVICE AGENT shall process payments of permanent disability compensation and death benefits in accordance with Advisory Ratings, Findsings and Awards,- or settlement agreements, all which have been approved by the City in advance and all Compromise and,Release Agreements, Computations, and Permanent ,:'--,. - - - '' • '' " _Di-ffa:bIiity Ratings resulting from an informal rating or from a Formal Findings and Award shall be prepared as part of the administration services. ; 8. EMPLOYEE SERVICES: . , SERVICE AGENT agrees to provide the following services as part of an employee informational and-rehabilitation program: -7- A. Provide consultation and I recommendations regarding the development of policies and procedures for employee advisory services. .' ' • ' . '. '' '•. -' •'•• - . • •;. ' •..'.> -: , , : ' B. Provide information and guidance to all injured employees. C. Identify and assist in solving employee problems arising out of work-incurred disabilities. D. Consult with employee groups, unions, on problem .cases at CITY'S direction. ;-. E. Assist in the development of policies and procedures to ensure that return to work or reassignment of injured employees is consistent with the findings of State Administrative Agencies. 9. SB 90 STATE MANDATED' LOCAL COSTS REIMBURSEMENT SERVICES: SERVICE AGENT agrees to provide computer and management assistance services to permit filing for reimbursement of State Mandated Costs under Senate Bill 90 with respect to Workers Compensation benefits and expenses. Said services shall include the provision of a breakdown under both Method I and Method II of the State Instructions commencing with fiscal year ending June 30, 1982.. ••.'• .- •• ' '•>••..'.".'• ;..;•:.- - ,':'.-'•' • '' •,. • r..y.'.' ,, • 10. ASSUMPTION OF EXISTING CLAIMS; '.''•• : ; SERVICE AGENT shall acquire and maintain all CITY'S open and closed claim files, log books and other records from previous SERVICE AGENT. All open claims shall be reviewed and updated. Past claims information shall be inputted in SERVICE AGENT'S computer system and included in periodic reports here- after described. -8- 11. TRUST ACCOUNT: ' A. CITY shall deposit with the SERVICE AGENT funds which SERVICE AGENT will use to establish a trust account on behalf of the CITY for the settlement of claims. Upon request of the SERVICE AGENT, the CITY shall transmit sufficient funds to main- tain the trust account balance at a'level adequate to meet current expenditures as authorized by this Agreement. B. All cancelled checks drawn-upon the trust account and the bank's statement for the trust account shall be forwarded to CITY monthly. In addition, numbered colored carbon copies of all checks issued shall be mailed weekly to CITY. . C. All employees of SERVICE AGENT who have access to the trust account, or the records thereof, shall be bonded. : 12. PERIODIC REPORTS; . ' \ v ^ " : V • ^ ;': SERVICE AGENT agrees to provide any and all statistical services necessary to maintain control of self-insurance costs and continue the efficient operation of the Program. Said services shall include, but not be limited to, the following: A. Provision of a monthly loss report for the preceeding month, on or before the twentieth (20) day of such"succeeding calendar month, setting forth, not by-way of limitation, the following information: the location, the description of the -_ ^ ^ . ' """loss, the nature of the injury, the number of days lost from work, OSHA coding, and reserves and payments made during the given month. • • ' ' • ." - • . , • ' ' •".•-.'••' B. Submission of a comprehensive monthly report, for the preceding month, on or before the twentieth (20) day of such succeeding calendar month, delineating a "year to date" complete run of all incurred reserves and payments. : / C. Provision of a complete monthly breakdown for the preceding month, on or before the twentieth (20) day of each month, of all claims as well as "year to date" breakdown by location and department. D. Maintenance of all records and statistical data on losses arising from employee injuries as may be required under the appropriate laws of the State of California, and rules and regulations thereto. / E. Provision of data and information relative to the establishment of a reserve dollar amount for each and every claim after Administrator's analysis of said claim, monitor each and every claim, at a minimum quarterly, to determine if a change in the reserve dollar amount is required, and provide an analysis of the reserve fund at such times as the City may require, in order to insure the adequacy of said fund in light of anticipated and accrued costs,' expenses and claims. : F. Provision of a quarterly narrative status report on all major claims with a total expected cost of Ten Thousand Dollars ($10,000) or more. Such report shall also identify those cases/ claims believed to involve legal expense in excess of One Thousand Dollars ($1,000). • G. Provision of a comprehensive annual statistical summary • -. f ' - "survey and narrative report to serve-as the basis for evaluation of the City's self-insurance program and to permit preparation of reports required by the Department of Industrial Relations. Such report shall be submitted to the City no later than August 8, following the end of each contract year. -10- 13. IN DEMN'I FI CAT I ON : .: ' SERVICE AGENT agrees to indemnify, hold harmless and defend CITY, its City Council and each member thereof/ and every officer and employee of CITY from any and all liability or financial loss resulting from any suits, claims losses or actions brought against and from all costs and expenses of litigation . brought against CITY, its City Council and 'each member thereof and any officer or employee of CITY which results directly or indirectly from the wrongful or negligent acts of SERVICE AGENT while engaged , by SERVICE AGENT in the performance of this Agreement. 14. INSURANCE; . .' ' .. •;'.•>'. •'/•.';.; -:'-:'. . . •••..:,-.:. '''.•'''•... A. SERVICE AGENT agrees to maintain in force at all times during the term of this Agreement, Workers Compensation. Insurance as required by law. '. ; • ; \ • B. SERVICE AGENT agrees to maintain in force at all times during the term of this Agreement, Professional Liability Insur- ance in the amount of One Million ($1,000,000) dollars which shall provide coverage for any damages or losses suffered by CITY as the result of any error or omission or neglect by SERVICE AGENT which arises out of the professional services required by this Agreement. C. Insurance policies shall provide that the insurance cpyeraqe-^Flall not be cancelled or reduced by the insurance ,^-*r*"" - . ',~^ -"carrier without CITY having been given forty-f-ive (45) days prior written notice thereof by such carrier. SERVICE AGENT agrees that it will not cancel or reduce said insurance coverage. D. • At all times during the term of this Agreement, SERVICE AGENT shall maintain on file with the City Clerk of CITY a certificate of the insurance carrier or carriers showing that the aforesaid policies are in effect in the amounts -'•'.' . . ' -11- ' ''-•.•• • • '.-..'- .•.:'•'' above provided, and that the polices cannot be cancelled or reduced except on forth-five (45) days' notice to CITY. SERVICE AGENT shall not have the right to receive compensation. under this Agreement until such certificate or certificates are . • • ' • . • ' • ... - • I • . •. . ' - • . filed with the City Clerk. .. ; 15.. CANCELLATION; : , "; .' ;.: '..' This Agreement may be cancelled by the CITY or the SERVICE AGENT at any time with or without cause upon giving written notice of at least sixty (60) days prior to the date . of termination. : 16. DISPOSITION OF CLAIM FILES AND RECORDS ON . . : : - TERMINATION OF AGREEMENT: . •./ . ' ' -,; , All files and records on each claim shall be the , property of the CITY. In the event of cancellation or expiration of this Agreement and the Agreement is not renewed, the CITY shall require SERVICE AGENT to return all claim files to the CITY. '17. CONTRACT ADMINISTRATOR • '. •'...''-.' .•;•'.'; : -. The Contract Administrator for CITY shall be the Assistant City Manager/Administration, or his designee, \* . - *.'.,•,-' •". ' - - ' '. -".•'. ' 18- SUGCSS'SORS AND ASSIGNS. '• '•'•-••"..:':- •>" .'• •'• •:''' , /•/•••; -': iC.:-'* — -=> '^ This Agreement covers professional services of a specific and unique nature and SERVICE AGENT'shall not assign, sublet nor transfer its interest in this Agreement without the prior written consent of CITY. -12- 19. CONFLICT OF INTEREST . SERVICE AGENT agrees not .to accept any employment during the term of this Agreement by any other person'; firm or corporation which employment is or may likely develop a conflict of interest between CITY'S interests,and the interests of third parties. "Conflict" as used herein shall be defined and interpreted in accordance with Section 1090 of the Government Code. Executed this " day of June 1981 in the City of Carlsbad, California. City of Carlsbad, a Municipal Corporation of the State of - '•!:•..-•••- '" .:' . ... " California. . : By FRANK ALESHIRE, City ManageF ATTEST: ALETHA L. RAUTENKRANZ, City Clerk FLEMING AND ASSOCIATES By_ as to form: VINCENT F. BIONDO, Jr. City Attorney -13-