CITY COUNCIL STAFF REPORT
MEETING DATE: May 18, 2016
PREPARED BY: Michelle Katsuyoshi, Human Resources Manager
APPROVED BY: City Manager
Title
THIRD PARTY CLAIMS ADMINISTRATION FOR WORKERS' COMPENSATION
END
RECOMMENDATION(S)
RECOMMENDATION
Adopt resolution authorizing the City Manager to execute and subsequently administer a two-year agreement (FY 2016-17 and FY 2017-18) with Innovation Claims Solutions, Inc. to provide third party claims administration for workers' compensation in an amount not to exceed $69,080.
BODY
COUNCIL PRIORITIES, GOALS & STRATEGIES:
Ongoing Priorities
Maintaining fiscal responsibility
Preserving and cultivating public trust
2016 Focus Areas
Enhancing Our Services
REPORT NARRATIVE:
Periodically, the Human Resources Division conducts reviews of various Human Resources related vendor agreements to ensure that the City is receiving the best possible service at a reasonable cost. As part of this process, the City issued a request for proposal (RFP) to provide third party claims administration of workers' compensation services in February 2016. The City partnered with the City of Gilroy and jointly solicited proposals from qualified third party administrators for the administration of our self-insured workers' compensation program.
The City received proposals from three firms and they were all reviewed.
|
|
Provider |
FY 16/17 Cost |
FY 17/18 Cost |
Total Cost |
|
1. |
Innovative Claims Solutions, Inc. (ICS) San Ramon, CA |
$34,380 |
$34,700 |
$69,080 |
|
2. |
JT2 Integrated Solutions Oakland, CA |
$41,500 - $44,100 |
$42,750 - $45,500 |
$84,250 - $89,600 Plus a $10,000 implementation fee |
|
3. |
TriStar Risk Management Rancho Cordova, CA |
$55,898 |
$57,295 |
$113,193 |
Based on a combination of factors including ability to provide the necessary scope of services, professional experience, customer service, and overall cost to the City, Innovative Claims Solutions, Inc. (ICS) emerged as the most qualified proposal to provide the best service and value to the City and was selected under Morgan Hill Municipal Code Section 3.04.250(D).
ICS has been providing third party claims administration for workers' compensation to the City since July 2011 and during the last five years of the contract, ICS has administered several lengthy and complex workers' compensation case settlements that resulted in City Council review and approval. ICS has expended significant resources and continues to educate and inform Human Resources, departmental Workers' Compensation liaisons, and the City Attorney team on the particular workers' compensation cases as well as the general aspects of workers' compensation administration and case law.
COMMUNITY ENGAGEMENT: Not Applicable
ALTERNATIVE ACTIONS:
Council could choose to not authorize the City Manager to execute and administer the contract with ICS and reconsider a different third party claims administrator for workers' compensation. This could result in the City not having a third party claims administrator for an unspecified period of time, since the current contract with ICS is due to expire on June 30, 2016.
PRIOR CITY COUNCIL AND COMMISSION ACTIONS:
The table below depicts the previous City Council actions regarding the approval of consultant agreements with ICS to provide third party workers' compensation administration:
|
City Council Date |
ICS Contract |
Term |
Amount |
|
June 22, 2011 |
Consultant Agreement |
07/01/2011 - 06/30/2013 |
$62,000 |
|
June 19, 2013 |
First Amendment to the Consultant Agreement |
07/01/2013 - 06/30/2014 |
$34,913 |
|
July 2, 2014 |
Second Amendment to the Consultant Agreement |
07/01/2014 - 06/30/2015 |
$35,960 |
|
September 2, 2015 |
Continuance and Third Amendment to the Consultant Agreement |
07/01/2015 - 6/30/2016 |
$37,039 |
FISCAL AND RESOURCE IMPACT:
The maximum amount of the consultant agreement is $69,080 for a two-year period (FY 2016-17 and FY 2017-18). These funds have been included in the Workers' Compensation budget for FY 2016-17 and FY 2017-18.
CEQA (California Environmental Quality Act):
Not a Project
The approval of this contract is not a project, as defined in Section 15378 of the State CEQA Guidelines
LINKS/ATTACHMENTS:
Resolution
Consultant Agreement: Innovation Claims Solutions, Inc