AgdaPkt 2015-04-27 Interview and Joint SA and PFA

Browse Search

7.1.C. - Page 1 REPORT To the Honorable Mayor and City Council From the City Manager April 27, 2015 SUBJECT Agreement for Third Party Administrator (TPA) to Provide Workers' Compensation Administration Services. RECOMMENDATION By motion, approve and authorize the City Manager to execute a three-year term agreement in an amount up to $1,063,375 with York Risk Services Group, Inc. to act as Third-Party Administrator for the City's self-insured workers' compensation program effective July 1, 2015 through June 30, 2018; and authorize City Manager to extend the agreement by two additional one-year terms in an amount not to exceed $380,000 per year. BACKGROUND The City of Redwood City is a self-insured employer under California Workers' Compensation laws. In order to administer the self-insured program, the City retains the services of a Third-Party Administrator (TPA) to manage the processing of workers' compensation claims and to ensure the City is in compliance with the various regulations and procedures that govern a self-insured workers' compensation program. The City has contracted with Athens Administrators for this service since 2009, and the current contract will expire in July 2015. In recent years, the City has experienced a significant increase in workers' compensation claim costs, increasing the City's annual expenditures and long-term financial liabilities. In addition, employee absences associated with the workers' compensation program have posed an ongoing operational challenge, especially to the City's public safety departments. In an effort to address these impacts, the Council made significant investments in the City's workers' compensation program in the 2014- 15 budget, including the addition of a dedicated workers' compensation analyst position in Human Resources and the transfer of $6 million of projected 2013-14 General Fund excess revenue toward the City's unfunded liability for workers' compensation. Since that time, the Human Resources Division has been working to enhance and improve its management of the workers' compensation program, with increased emphasis on injury prevention, effective claims management, and return-to-work programs. As the City's Third-Party Administrator is an integral partner in ensuing the success of these efforts, staff conducted a Request for Proposal (RFP) for TPA services to determine the best option for securing high-quality claims administration in alignment