HomeMy WebLinkAboutR-2002-114 Workers’ Compensation Program, Third Party Administrator Agreement w/ Ward North America, Inc.RESOLUTION NO. R-2002-114
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 3rd day of September, 2002.
ATTEST:
City Clerk
(Ik)res workers comp/ward north america 02/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.
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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.
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.
(f)
(g)
(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 ($130) for each
workers' compensation medical only;
• Five hundred fifty dollars ($595) for each workers'
compensation indemnity.
The annual minimum deposit fee shall include an administrative
fee of two thousand seven hundred dollars ($2,700).
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Loss Control to be provided on an as -needed basis at a rate of $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, 2002 and terminating at midnight on December 31, 2002;
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
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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 j18) 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
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
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(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.
b. The City will indemnify and hold harmless Service Company, its
directors, officers, employees, agents, subsidiaries, affiliates and subcontractors from
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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
companies rated A -VII or higher in Best's Guide and admitted in the State of
Washington.
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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.
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
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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
Liz Nelson
Senior Vice President
Ward North America, Inc.
17862 East 17th Street
Suite 111
Tustin, CA 92870
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.
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CITY OF YAKIMA
By:
R. A. Zais, Jr.
City Manager
Date: e 57 .200
ATTEST:
WARD NORTH AMERICA, INC.
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Date:
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BUSINESS OF THE CITY COUNCIL
YAKIMA, WASHINGTON
AGENDA STATEMENT 1
Item No.
For Meeting Of °I — 3 - o a.
ITEM TITLE: Workers' Compensation Program, Third Party
Administrator Agreement with Ward North America, Inc.
SUBMITTED BY: Archie M. Sutton, Human Resources Manager
CONTACT PERSON/TELEPHONE: Archie M. Sutton / 575-6124
SUMMARY EXPLANATION:
The attached Resolution authorizes the City Manager to execute the attached service
agreement with Ward North America, 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 $550
to $595 or 8.2 % per claim. The rate for medical -only claims will be increase from
$120 to $130 or 8.3% for each workers compensation claim. Based on previous claims
history, the estimated annual administrative fee to Ward North America, Inc.; is
$30,000, payable quarterly ; in advance. In the event claims exceed the estimated
annual fee, an adjustment per claim will be assessed at the rates shown above.
Accident prevention training (loss control) will be on an as -needed basis at the rate of
$100 per hour. The term of contract period shall commence January 1, 2002 and end
December 30, 2002. Either party may terminate the agreement by giving not less
than thirty (30) days written notice to the other party, except for non-payment of fees.
Resolution x Ordinance Contract X Other (Specify)
Funding Source 514 Workers' Compensation Program
APPROVED FOR SUBMITTAL:
City Manager
STAFF RECOMMENDATION: Adopt resolution
BOARD/COMMISSION RECOMMENDATION:
COUNCIL ACTION: Resolution adopted. RESOLUTION NO. R-2002-114
Human Resources/Agenda
Ward North America/2001