HomeMy WebLinkAboutR-2000-035 Year 2000 Workers’ Compensation Program Third Party Administrator Agreement w/ Ward North America, Inc. for January 1 tRESOLUTION NO. R-2000- 5
A RESOLUTION authorizing the City Manager of. the City of Yakima to execute a
Workers` Compensation Third Party. Administrator's 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
Administrator's Agreement with Ward North America, Inc. for administration of the
City's workers' compensation claims. , /
ADOPTED BY THE CITY COUNCIL this '`� day of 4pRiL- , 2000.
ATTEST:
Place, Mayor
City Clerk
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 eon -yens -able cases-. In
no 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 requiredJor these:paym€nts.
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(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.
(i} 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 Ioss 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 thousand
dollars ($30,000.00), 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 minimum fee
will be subject to adjustment by performance of claim
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count audits on the basis of Service Company claim data
and application of the following per claimant fees:
• One hundred ten dollars ($110) for each
workers' compensation medical only;
• Five hundred twenty-five dollars ($525) for
each workers' compensation indemnity.
The annual minimum deposit fee shall include an
administrative fee of two thousand four hundred dollars
($2,400) 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, medic -al 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) except
that SIU services will be billed on a quarterly basis at the rate of seventy-five
dollars ($75) per hour plus expenses.
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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, 2000 and terminating at midnight on
December 31, 2000; 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 m ay 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 of the contract term. Any claims occurring during the term of this
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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 daims 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 Ato
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.
10. City's Obligation to Cooperate_ The obligation of Service Company to
perform its duties hereunder is conditioned upon the City's cooperation with
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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 and Hold Harmless.
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 dlorneys fees and costs) to which the City, its
elected/ appointed 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 misconduct and/ or negligent acts / omissions of the
City and/ or its elected/ appointed 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.
Page 6 of 11
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 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
Page 7 of 11
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, 2000, 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.
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, and Washington State's anti-
discrimination law as contained in RCW Chapter 49.60 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
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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:
TO Service Company:
Human Resources Manager
City of Yakima
129 North Second Street
Yakima, WA 98902
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.
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24. Integration and Supersession. This Agreement sets forth all of the
terms, conditions, and_agreementsof 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 shad- 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.
Page 10 -of 11
CITY OF YAKIMA
B
Date:
J
R. A. Zis, Jr.
City Manager
ATTEST:
City Clerk --
WARD- NORTH AMERICA, INC.
By:
f„
Title:
(
Date: 9 f3A67(2,1
Resolution No. R-2000-35
4t,
, to
V5f?
Contract No. 2000-28
Page 11 of -11-
ITEM TITLE:
BUSINESS OF THE CITY COUNCIL
YAKIMA, WASHINGTON
AGENDA STATEMENT
Item No 1 t4'
For Meeting Li - 4-U 0
Workers' Compensation Program, Third Party
Administrator Agreement with Ward North America,Inc-
January 1, 2000 to December 31, 2000
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 Wrad North America, Inc., as the City's third party administrator for our Self -
Insurers Workers Compensation Program. The new contract adjust the fee structure
by increasing the charge to process indemnity (time loss) claims from $500 to $525
or 5.0% per claim. Rates for medical -only claims will increase from $100 to $110 for
each workers compensation claim. Based on previous claim history , the estimated
annual administrative fee to Ward North America, Inc is 524,000. This estimated
amount includes S16,875 in administrative expenses. S7,125 for 75 hours of accident
prevention training (loss control). -1ny loss control hours in excess of 75 contract
hours mill be billed at S100 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 X Contract _ Other (Specify) Report
Funding Source 514 WORKERS COMPENSATION FUND
APPROVED FOR SUBMITTAL:
City Manag
STAFF RECOMMENDATION: Approve Contract
BOARD/COMMISSION RECOMMENDATION:
COUNCIL ACTION:
Legal 131) agenda