HomeMy WebLinkAboutR-1999-086 Third Party Administrators AgreementRESOLUTION NO. R-99-8 6
A RESOLUTION authorizing the City Manager of the City of Yakima to execute a Workers'
Compensation Third Party Administrators Agreement with Ward North
America, Inc. for administration of the City's workers' compensation
claims.
WHEREAS, the City of Yakima requires professional services to investigate, settle, and
otherwise administer the City's workers' compensation claims; and
WHEREAS, Ward North America, Inc. has the experience and expertise to provide said
professional services to the City, and is willing to do so in accordance with the terms and
conditions of the attached agreement; and
WHEREAS, the City Council deems it to be in the best interest of the City of Yakima to
enter into the proposed and attached agreement with Ward North America, Inc. for
administration of the City's workers' compensation claims, now, therefore,
BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF YAKIMA:
The City Manager of the City of Yakima is hereby authorized and directed to execute
the attached and incorporated Workers' Compensation Third Party Administrators Agreement
with Ward North America, Inc. for administration of the City's workers' compensation claims.
ADOPTED BY THE CITY COUNCIL this 6th day of July, 1999
ATTEST:
j
City Clerk
(1k)res/99 workers comp/ward north america/pm
John Puccinelli, Mayor
WORKERS' COMPENSATION THIRD PARTY ADMINISTRATOR'S
AGREEMENT
THIS AGREEMENT is made and entered into by and between WARD
NORTH AMERICA, INC., with its principal place of business at 610 West Ash
Street, San Diego, California 92101 (hereinafter referred to as "Service Company")
and the CITY OF YAKIMA, with its principal place of business at 129 North
Second Street, Yakima, Washington 98901 (hereinafter referred to as "City").
WHEREAS, the City maintains a self-insured plan to cover its workers'
compensation liabilities in the State of Washington; and Service Company has
agreed to perform certain services in connection therewith, as herein set forth:
NOW, THEREFORE, in consideration of the mutual covenants, promises,
and conditions set forth herein, it is agreed by and between the City and Service
Company as follows:
1. Scope of Services. During the period of this Agreement, Service
Company shall represent and act for City in matters pertaining to the liability of
City for claims based on events which occur during the term of this Agreement
under the Workers' Compensation Act of the State of Washington. During the
term hereof, Service Company shall devote its best efforts in the conduct of its
duties hereunder. Such duties shall include the following:
(a) Receive notice of and create files on each claim reported and
maintain these files for City.
(b) Investigate all claims as required to determine their validity
and compensability.
(c) Determine proper benefits due on compensable cases. In 110
event will Service Company propose a settlement of a
disputed claim or compromise the rights of City without its
prior consent following a review of the complete file
maintained on the claim by Service Company.
(d) Make timely payment of benefits due, in accordance with
payment procedures as established from funds provided by
City. City will be wholly responsible for providing such
funds as may be required for these payments.
Page 1 of 10
Magee/workers comp ward 99/pm
(e) Prepare documentation and defenses of cases considered
non -compensable and assist selected legal counsel in
preparation of cases for hearings, appeals, and/or trial.
(f) Maintain and provide City pertinent data on all claim
payments.
(g)
Provide monthly and/or quarterly computerized loss
reports in a tailored format, as mutually agreed at inception
of the program, showing descriptive data, details of each
month's payments, total payments, reserves and total
experience for each claim. Data reporting services, in
accordance with this Agreement, are limited to the reporting
format, content and number of copies specified in the
attached and incorporated Addendum One.
(h) Provide excess insurers such reports as they may reasonably
require within specific excess coverage reporting
requirements.
(1)
Provide information and assistance as may be reasonably
required for preparation and filing of all reports required by
any state agency in connection with City's approved self-
insured status.
(j) File with the appropriate state administrative departments
such information as is required on each claim.
(k) Provide managed care services as described in the attached
and incorporated Addendum Two.
(1) Provide loss control services as mutually agreed.
2. Consideration. In consideration of the satisfactory performance by
Service Company of the services required hereunder, City shall pay to Service
Company:
(a) An annual minimum deposit fee of thirty-five thousand three
hundred and twenty-five dollars ($35,325.00), payable
quarterly in advance. The first payment will be due within
thirty (30) calendar days of execution of this Agreement, and
subsequent payments will be due within thirty (30) calendar
days of the beginning of each quarter thereafter. The
Page 2 of 10
Qk)agree/workers comp ward 99/pm
minimum fee will be subject to adjustment by performance of
claim count audits on the basis of Service Company claim
data and application of the following per claimant fees:
• One hundred dollars ($100) for each workers'
compensation medical only;
• Five hundred dollars ($500) for each workers'
compensation indemnity.
The annual minimum deposit fee shall include an
administrative fee of three thousand dollars ($3,000) and a
loss control fee of seven thousand one hundred twenty-five
dollars ($7,125). The $7,125 loss control fee is for the
provision of up to 75 hours of scheduled loss control services
at the rate of ninety-five dollars ($95) per hour. Loss control
hours in excess of 75 hours will be additionally chargeable at
the rate of one hundred dollars ($100) per hour.
(b) Costs for Managed Care Services as outlined in Addendum
Two.
(c) Additional services requested by City will be compensated at
such fee and payment terms as mutually agreed by both
parties.
(d) To pay all allocated loss expense, as hereinafter defined, in
addition to the fees to be paid to Service Company.
Allocated loss expense is defined as all attorney's fees, court
and/or hearing costs, costs of depositions, documents and
exhibits, witness and expert fees, medical and engineering
appraisal, surveillance, independent adjusting, managed
care, photography and other incidental and special costs
incurred to evaluate compensability of claims.
Not included in the above fees are services for: Service Company staff
attendance at Workers' Compensation hearings, pretrials, trials or benefit
conferences; and Fraud/Special Investigation Unit (SIU) services beyond initial
reporting mandates to authorities, agencies or excess carriers. These services will
be billed to the City on a quarterly basis as incurred at the rate of sixty-five
dollars ($65) per technical hour plus expenses (inclusive of all clerical support
and Service Company in -office operating overhead).
Page 3 of 10
(Ik)agee/workers comp ward 99/pm
The City shall make sufficient and timely funds available to Service
Company to be used by Service Company to pay claims and allocated loss
expense. The City shall also advise Service Company on a timely basis of all
pertinent excess insurance reporting requirements and/or reporting
modifications for all annual periods for which claim administration services are
provided.
3. Term of Agreement. The term of this Agreement shall be for a period of
one (1) year commencing January 1, 1999 and terminating at midnight on
December 31, 1999; unless sooner terminated by either party in accordance with
Section 4 and/or Section 6 of this Agreement.
4. Termination. The City or Service Company may terminate this
Agreement, with or without cause, by either party giving not less than thirty (30)
calendar days written notice of termination; provided, however, that Service
Company may terminate this Agreement, at its option, after providing the City
with ten (10) calendar days written notice of termination in the event that the
City fails to pay Service Company for a valid Service Company invoice within
sixty (60) calendar days of receipt by the City of said invoice.
5. Payment. Except as otherwise provided in Section 2 of this Agreement,
Service Company shall submit satisfactory documentation/invoice evidencing
services provided pursuant to this Agreement to the City Human Resource
Division Manager at the end of each quarter in which such services are provided
to the City. The City shall make payment to Service Company within sixty (60)
calendar days of receipt of each monthly billing. All payments are expressly
conditioned upon Service Company providing services hereunder that are
satisfactory to the City.
6. Renegotiation of Fee. This Agreement is entered into with the
understanding that existing federal, state, or other jurisdictional regulations will
remain in effect for the duration of this Agreement. The City agrees that should
administrative or other costs of service provided hereunder be substantially
increased as a result of modifications in existing law, enactment of new
legislation, or promulgation of new administrative guidelines, Service Company
service fees may be renegotiated during the Agreement term. If revised fee
agreements cannot be reached, either party may terminate this Agreement, at its
option, after thirty (30) calendar days written notice to the other party.
7. Audits. Audit adjustments will be submitted at the end of the annual
term and quarterly thereafter based upon the cumulative claim count as
contained in the computer reports required by Section 1 of the Agreement. A
final adjustment of fee will be made as of eighteen (18) months following the end
Page 4 of 10
Qk)agree/workers' comp ward 99/pm
of the contract term. Any claims occurring during the term of this Agreement
which are reported more than eighteen (18) months following the end of the
contract term will be subject to additional fees for administration to be agreed
upon by the parties.
8. File/Records Retention. All claims and related files generated by Service
Company as a result of its activity under this Agreement shall remain at all times
the property of the City with the exception of any supporting data required by
Service Company to make such accountings to the City or excess insurers as are
required in this Agreement. Service Company will retain claim files for one year
following date of closure. Thereafter, files will be returned to the City or
forwarded to such location as may be designated by the City for continued
storage at City expense. Upon Service Company's request, closed claim files will
be returned for additional administration as may be required. In the event of
termination or non -renewal of Service Company services, and assumption of
continuing administration of claims by the City, Service Company will transfer
all open and retained closed claim files for all service years to the City, or its
designee, as of the effective date of termination, at City expense.
9. Handling of Claims after Termination of Agreement. This Agreement is
for the period provided for in Section 1. Any continuation or renewal of this
Agreement shall be the subject of further negotiation between the parties. Upon
termination of this Agreement, in whole or in part, in accordance with Section 1,
and/or non -renewal, in entirety or of any major operating subsidiary, entity or
portion thereof, City shall have the option to:
(a) Assume all open claims pending for the terminated or non-
renewal portion of the program as of the effective date of
termination or non -renewal, provided, however, that Service
Company shall be entitled to receive its full fee for all claims
entered into its data files prior to the effective date of
termination or non -renewal; or
(b) Upon agreement by both parties of a rate of compensation,
require Service Company to continue administration to
conclusion, all open claims associated with that portion of
the program terminated or non -renewed. Such rate of
compensation shall thereafter be reviewed by the parties on
an annual basis and shall be the subject of mutual agreement
between the parties. Sufficient and timely funds shall
continue to be made available by City for the payment of
claims and allocated loss expense until all claims are
liquidated.
Page 5 of 10
(Ik)agree/workers comp ward 99/pm
10. City's Obligation to Cooperate. The obligation of Service Company to
perform its duties hereunder is conditioned upon the City's cooperation with
Service Company with respect to the activities of Service Company including,
but not limited to, responding to Service Company's requests for information
promptly; providing excess carrier reporting requirements; meeting with Service
Company and/or third parties, as may be needed; making decisions on matters
which, in the professional opinion of Service Company, should be made by the
City; the provision of funds referred to in Section 2; and performance by the City
of all other obligations of this Agreement.
11. Taxes. The City shall pay any sales or use taxes or other taxes or
government assessments or duties relating to this Agreement or to payments or
services to be rendered under this Agreement in addition to all other payments
set forth in this Agreement. If Service Company makes payment of any such
taxes or government assessments or duties, the City shall promptly reimburse
Service Company. This paragraph does not apply to federal or state taxes based
upon net income which are imposed on Service Company.
12. Status of Service Company. Service Company and the City understand
and expressly agree that Service Company is an independent contractor in the
performance of each and every part of this Agreement. Service Company and its
employees shall make no claim of City employment nor shall claim any related
employment benefits, social security, and/or retirement.
13. Indemnification.
a. Service Company will indemnify and hold harmless the City, its
elected officials, officers, employees, and/or agents from any and all suits,
claims, damages, liability, loss, cost, fines, assessments, penalties or expense
(including reasonable attorneys fees and costs) to which the City, its elected
officials, officers, employees, and/or agents may be subjected solely as a
consequence of the willful misconduct and/or negligent acts or omissions of
Service Company, its directors, officers, employees, agents, subsidiaries, affiliates
and subcontractors arising out of or in connection with the performance or
nonperformance of the services, duties, and obligations required under this
Agreement.
b. The City will indemnify and hold harmless Service Company, its
directors, officers, employees, agents, subsidiaries, affiliates and subcontractors
from any and all suits, claims, damages, liability, loss, cost, fines, assessments,
penalties or expense (including reasonable attorneys fees and costs) to which
Service Company may be subjected solely as a consequence of the willful
Page 6 of 10
(1k)agree/workers comp ward 99/pm
misconduct and/or negligent acts/omissions of the City and/or its elected
officials, officers, employees, and/or agents arising out of or in connection with
the performance or nonperformance of its duties and obligations required under
this Agreement.
c. In the event that the directors, officials, officers, agents, and/or
employees of both the City and Service Company are negligent, each party shall
be liable for its contributory share of negligence for any resulting suits, actions,
claims, liability, damages, judgments, costs and expenses (including reasonable
attorney's fees).
d. Nothing contained in this Section or this Agreement shall be
construed to create a liability or a right of indemnification in any third party.
14. Insurance provided by Service Company.
a. Commercial Liability Insurance. On or before the date this
Agreement is fully executed by the parties, Service Company shall provide the
City with a certificate of insurance as proof of commercial liability insurance with
a minimum liability limit of One Million Dollars ($1,000,000.00) combined single
limit bodily injury and property damage. The certificate shall clearly state who
the provider is, the amount of coverage, the policy number, and when the policy
and provisions provided are in effect (any statement in the certificate to the effect
of "this certificate is issued as a matter of information only and confers no right
upon the certificate holder" shall be deleted). Said policy shall be in effect for the
duration of this Agreement. The policy shall name the City, its elected officials,
officers, agents, and employees as additional insureds, and shall contain a clause
that the insurer will not cancel or change the insurance without first giving the
City thirty (30) calendar days prior written notice (any language in the clause to
the effect of "but failure to mail such notice shall impose no obligation or liability
of any kind upon the company" shall be crossed out and initialed by the
insurance agent). The insurance shall be with an insurance company or
companies rated A -VII or higher in Best's Guide and admitted in the State of
Washington.
b. Commercial Automobile Liability Insurance. On or before the date
this Agreement is fully executed by the parties, Service Company shall provide
the City with a certificate of insurance as proof of commercial automobile
liability insurance with a minimum liability limit of One Million Dollars
($1,000,000.00) combined single limit bodily injury and property damage. The
certificate shall clearly state who the provider is, the amount of coverage, the
policy number, and when the policy and provisions provided are in effect (any
statement in the certificate to the effect of "this certificate is issued as a matter of
Page 7 of 10
ak)agree/workers comp ward 99/pm
information only and confers no right upon the certificate holder" shall be
deleted). Said policy shall be in effect for the duration of this Agreement. The
policy shall name the City, its elected officials, officers, agents, and employees as
additional insureds, and shall contain a clause that the insurer will not cancel or
change the insurance without first giving the City thirty (30) calendar days prior
written notice (any language in the clause to the effect of "but failure to mail such
notice shall impose no obligation or liability of any kind upon the company"
shall be crossed out and initialed by the insurance agent). The insurance shall be
with an insurance company or companies rated A -VII or higher in Best's Guide
and admitted in the State of Washington.
c. Professional Liability Insurance. On or before the date this
Agreement is fully executed by the parties, Service Company shall provide the
City with a certificate of insurance as evidence of professional liability coverage
with a limit of One Million Dollars ($1,000,000.00) per claim and an annual
aggregate limit of at least One Million Dollars ($1,000,000.00). The certificate
shall clearly state who the provider is, the amount of coverage, the policy
number, and when the policy and provisions provided are in effect. The
insurance shall be with an insurance company rated A -VII or higher in Best's
Guide. If the policy is on a claims made basis, the retroactive date of the
insurance policy shall be on or before January 1, 1999, or shall provide full prior
acts. The insurance coverage shall remain in effect during the term of this
Agreement and for a minimum of one (1) year following the termination of this
Agreement.
d. Insurance provided by Subcontractors. Service Company shall
ensure that all subcontractors it utilizes for work/services required under this
Agreement shall comply with all of the above insurance requirements.
15. No Insurance. It is understood the City does not maintain liability
insurance for Service Company and/or its employees.
16. Nondiscrimination Provision. During the performance of this
Agreement, Service Company shall not discriminate in violation of any federal,
state, or local law and/or regulation on the basis of race, age, color, sex, religion,
national origin, creed, marital status, political affiliation, or the presence of any
sensory, mental or physical handicap. This provision shall include but not be
limited to the following: employment, upgrading, demotion, transfer,
recruitment, advertising, layoff or termination, rates of pay or other forms of
compensation, selection for training, and the provision of services under this
Agreement.
Page 8 of 10
(Ik)agee/workers' comp ward 99/pm
17. The Americans With Disabilities Act. Service Company agrees to
comply with the Americans With Disabilities Act of 1990, 42 U.S.C. § 12101 et
seq. (ADA), and its implementing regulations. The ADA provides
comprehensive civil rights to individuals with disabilities in the area of
employment, public accommodations, state and local government services, and
telecommunications.
18. Compliance With Law. Service Company agrees to perform those
services under and pursuant to this Agreement in full compliance with any and
all applicable laws, rules, and regulations adopted or promulgated by any
governmental agency or regulatory body, whether federal, state, local, or
otherwise.
19. Non -Waiver. The waiver by Service Company or the City of the breach of
any provision of this Agreement by the other party shall not operate or be
construed as a waiver of any subsequent breach by either party or prevent either
party thereafter enforcing any such provision.
20. Assignment. This Agreement may not be assigned by either party
without the prior written consent of the other party; provided, however, this
provision shall not prohibit Service Company from subcontracting for any of the
activities to be performed by Service Company without any requirement of
obtaining the approval of the City provided, however, that any such
subcontracting shall not relieve Service Company of its obligations to City under
this Agreement.
21. Severability. If any portion of this Agreement is changed per mutual
agreement or any portion is held invalid, the remainder of the Agreement shall
remain in full force and effect.
22. Survival. Any provision of this Agreement which imposes an obligation
after termination or expiration of this Agreement shall survive the term or
expiration of this agreement and shall be binding on the parties to this
Agreement.
23. Notices. Unless stated otherwise herein, all notices and demands shall be
in writing and sent or hand delivered to the parties to their addresses as follows:
TO CITY:
Page 9 of 10
(1k)agree/workers comp ward 99/pm
Human Resources Manager
City of Yakima
129 North Second Street
Yakima, WA 98902
TO Service Company:
or to such other addresses as the parties may hereafter designate in writing.
Notices and/or demands shall be sent by registered or certified mail, postage
prepaid or hand delivered. Such notices shall be deemed effective when mailed
or hand delivered at the addresses specified above:
24. Integration and Supersession. This Agreement sets forth all of the terms,
conditions, and agreements of the parties relative to the subject matter hereof
and supersedes any and all such former agreements which are hereby declared
terminated and of no further force and effect upon the execution and delivery
hereof. There are no terms, conditions, or agreements with respect thereto,
except as herein provided and no amendment or modification of this Agreement
shall be effective unless reduced to writing and executed by the parties.
25. Governing Law. This Agreement shall be governed by, interpreted under
and construed in accordance with the laws of the State of Washington.
26. Venue. The venue for any action to enforce or interpret this Agreement
shall lie in the Superior Court of Washington for Yakima County, Washington.
CITY OF YAKIMA
Date:
R. A. Zais, Jr.
City Manager
Resolution No. R _lc) a _ a h
Contract No.
Page 10 of 10
(Magr../workmcamp wad 99/pm
WARD NORTH AMERICA, INC.
By:...
Title:
Date: ,i - tic /'/i 7
BUSINESS OF THE CITY COUNCIL
YAKIMA, WASHINGTON
AGENDA STATEMENT
Item No. i r L 7"
For Meeting Of July 6, 1999
ITEM TITLE: Workers' Compensation Program, Third Party Administrator Agreement
with Ward North America, Inc. - January 1, 1999 to December 31, 1999
SUBMITTED BY: Archie M. Sutton, Human Resource Manager
CONTACT PERSON/TELEPHONE: Archie M. Sutton , 575-6090
SUMMARY EXPLANATION:
The attached Resolution authorizes the City Manager to execute a service agreement
with Ward North America, Inc., formerly Scott Wetzel Services, Inc. as the City's
third party administrator for our Self -Insurers Workers Compensation Program. The
new contract adjusts the fee structure by increasing the charge to process
indemnity (time loss) claims from $475 to $500 or 5.3% per claim. Rates for medical -
only claims will remain the same, at $100 per claim. Based on previous claim history,
the estimated annual administrative fee to Ward North America is $35,325. This
estimated amount includes $3,000 in administrative expenses, $7,125 for 75 hours of
accident prevention training (loss control) and the balance in the individual claims
cost administration. Any loss control hours in excess of 75 contract hours will be
billed at $95 per hour. In the event claims exceed the estimated annual fee, an
adjustment per claim will be assessed at the rates shown above.
Resolution X Ordinance_ Contract X Other (Specify)
Funding Source WORKEsOMPFNSAI�N FUND
Report
APPROVED FOR SUBMITTAL:
STAFF RECOMMENDATION: Approve Contract
BOARD/COMMISSION RECOMMENDATION:
COUNCIL ACTION: Resolution adopted. RESOLUTION NO. R-99-86
Legal BD/Agenda
Ward/NA