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V '' . <br /> � ' <br /> REPOR T <br /> 7o the Honorable Mayor and City Council <br /> From the City Manager <br /> September 27, 2004 <br /> Subject <br /> Contract renewal with Third Party Administrator (TPA) for worker's compensation <br /> administration services, Claims Management Inc. (CMI) for the period of October 1, <br /> 2004 through June 30, 2005. <br /> Recommendation <br /> Authorize staff to extend agreement with Claims Management Inc. (CMI) to act as third <br /> party administrator for the City's self-insured worker's compensation program for the <br /> period of October 1, 2004 through June 30, 2005. <br /> Background � <br /> The City of Redwood City is a self-insured employer under the Workers' Compensation <br /> laws of the State of California. In order to fulfill our obligations as a self-insured <br /> employer, the City retains the services of a third party administrator (TPA) to ensure the <br /> City is in compliance with the various laws and procedures that govern the Worker's <br /> Compensation Program. <br /> Over the past few year's the City's workers' compensation program has gone through <br /> finro significant changes: <br /> 1) Change in Third Party Administrator from ABAG to Claims Management Inc. <br /> (CMI). The City's long time TPA suddenly terminated their senrices. <br /> 2) Joined a JPA to gain affordable coverage for excess insurance. After many <br /> years of increasing premiums the City was able to gain economies of scale by <br /> joining Bay Cities Joint Powers Insurance Authority. <br /> One benefit derived from by being part of the JPA includes claim oversight of the third <br /> party administrators. Due to efficiency and budget concerns the JPA sought to <br /> consolidate TPA's and scheduled an RFP process for TPA services. The City <br /> participated in the RFP process that took place in July, 2004. The selected TPA was <br /> Octagon who had positive references, called for a maximum examiner caseload of 140 <br /> (which represented a 20% reduction over other proposals) and has experience with very <br /> large systems. <br /> The City chose not change providers at this time and to continue with the current TPA <br /> until the remainder of this year for the following reasons: <br /> _ _ <br />