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HomeMy WebLinkAboutR-2001-051 Ward North America, Inc. Agreement (Worker’s Compensation Claims Third Party Administration)RESOLUTION NO. R-2001-51 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 cQO'/ day of March, 2001. /1)f - ATTEST: dry Place, Mayor City Clerk (1k)res workers comp/ward north america 01/pm WORKERS' COMPENSATION THIRD PARTY ADMINISTRATOR'S AGREEMENT THIS WORKERS' COMPENSATION THIRD PARTY ADMINISTRATOR'S AGREEMENT (hereinafter "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 the "Service Company") and the CITY OF YAKIMA, with its principal place of business at 129 North Second Street, Yakima, Washington 98901 (hereinafter the "City"). WHEREAS, the City maintains a self-insured plan to cover its workers' compensation liabilities in the State of Washington. WHEREAS, the City requires professional services to investigate, settle, and otherwise administer the City's workers' compensation claims. WHEREAS, Ward North America, Inc. has the experience and expertise to provide said professional services to the City, has done so in the past, and is willing to continue to do so in accordance with the terms and conditions of this Agreement. 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 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 required for these payments. Page 1 of 9 (1k)agree/workers' comp ward 2001/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) (g) Maintain and provide City pertinent data on all claim payments. Provide monthly and/or quarterly computerized loss reports in a tailored format, as mutually agreed to and as itemized in the attached and incorporated Addendum Two. (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 One. (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 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 count audits on the basis of Service Company claim data and application of the following per claimant fees: • One hundred twenty dollars ($120) for each workers' compensation medical only; • Five hundred fifty dollars ($550) for each workers' compensation indemnity. The annual minimum deposit fee shall include an administrative fee of two thousand seven hundred dollars ($2,700) 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 Page 2 of 9 (1k)agree/workers' comp ward 2001/pm 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 One. (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) except that SIU services will be billed on a quarterly basis at the rate of seventy-five dollars ($75) per hour plus expenses. 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, 2001 and terminating at midnight on December 31, 2001; 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. Page 3 of 9 (1k)agree/workers' comp ward 2001/pm 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 eachquarter 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 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 Page 4 of 9 (1k)agree/workers' comp ward 2001/pm 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. 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 benefits. 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 attorneys 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. Page 5 of 9 (1k)agree/workers' comp ward 2001/pm 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. 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. 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. 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 Page 6 of 9 (1k)agree/workers' comp ward 2001/pm 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, 2001, 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 its officers, agents, and/or 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 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. Page 7 of 9 (1k)agree/workers' comp ward 2001/pm 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 1.d.) R&D NOZrtJ 4 MEILtC.A z t z.1 1041' Ave.. West Suite C. TAcaI►w, WA 4eayb6 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. Page 8 of 9 (1k)agree/workers' comp ward 2001/pm CITY OF YAKEVIA By: R. A. Zais, Jr. City Manager Date: ATTEST: 91<a/uL-vt-- City Clerk• Resolution No. R-2001--51 Contract No. 2001-34 WARD NORT. AMERICA, INC. By: Ale" ,"Zi" Tit .S1 Date: F 414; 6 .Or iJL Page 9 of 9 (1k)agree/workerscomp ward 2001/pm ITEM TITLE: BUSINESS OF THE CITY COUNCIL YAKIMA, WASHINGTON AGENDA STATEMENT Workers' Compensation Program, Third Party Administrator Agreement with Ward North America, Inc. January 1, 2001 to Januaryl, 2002 SUBMITTED BY: Archie M. Sutton, Human Resource Manager CONTACT PERSON/TELEPHONE: Archie M. Sutton , 575-6090 SUMMARY EXPLANATION: Item No. ' 143 For Meeting 3 _2 (2-0 The attached Resolution authorizes the City Manager to execute a service agreement with Ward North America, 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 $525 to $550 or 5.0% per claim. Rates for medical -only claims will increase from $110 to $120 or 9% for each workers compensation claim. Based on previous claim history, the estimated annual administrative fee to Ward North America, Inc is $30,000. This estimated amount includes $22,875 in administrative expenses, $7,125 for 75 hours of accident prevention training (loss control). Any loss control hours in excess of 75 contract hours will be billed at $100 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) Report Funding Source 514 WORKERS COMPENSATION FUND APPROVED FOR SUBMITTAL: Z� A City Manager STAFF RECOMMENDATION: Approve Contract BOARD/COMMISSION RECOMMENDATION: COUNCIL ACTION: Human Resources/Agenda Ward North Amenca/2001 Resolution adopted. RESOLUTION NO. R-2001-51