HomeMy WebLinkAboutR-2005-080 Agreement with Ward North America, Inc.RESOLUTION NO. R-2005- 80
A RESOLUTION authorizing and directing the City Manager of the City of
Yakima to execute a Workers' Compensation Third Party
Administrator's Agreement and Addendum with Ward
North America, Inc. for administration of the City's
workers' compensation claims and for purposes of
obtaining on-line data services to assist with the
administration of said 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, the City of Yakima desires on-line data services in order
to assist with the administration of its workers' compensation claims; and
WHEREAS, the City does not have the staffing levels or specialized
expertise necessary to provide said on-line data services; and
WHEREAS, Ward North America, Inc. has the experience and
expertise to provide said professional services to the City and to provide and
perform said on-line data services, and is willing to do so in accordance with
the terms and conditions of the attached agreement and addendum; 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 and
addendum with Ward North America, Inc. for administration of the City's
workers' compensation claims and the provision and performance of on-line
data services for said 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 and the Addendum
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thereto for the provision and performance of on-line services for said workers'
compensation claims.
ADOPTED BY THE CITY COUNCIL this 17th day of May, 2005.
ATTEST:
City Clerk
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Paul P. George, Mayor
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, LP, a Georgia limited partnership, with its principal place of business at
610 West Ash Street, Suite 1900, 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, the Service Company 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
the 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.
(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.
(0 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 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-two thousand dollars ($32,000.00), 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 t 31ollars ($140) for each workers' compensation
medical only; Sem Civ
• Six hundred e dollars ($675) for each workers'
compensation indemnity.
The annual minimum deposit fee shall include an administrative fee of two thousand
seven hundred dollars ($2,700).
(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 expenses 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,
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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.
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 three (3) years
commencing January 1, 2005 and terminating at midnight on December 31, 2007; 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 quarterly 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/Record 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 expenses 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
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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 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
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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.
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 insurance 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 or companies 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, 2002, 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 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,
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recruitment, advertising, layoff or termination, rates of pay of 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 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:
Human Resources Manager
City of Yakima
129 North Second Street
Yakima, WA 98902
TO SERVICE COMPANY: Lorie Raiola
Compliance Manager
Ward North America, LP
610 West Ash Street, Suite 1900
San Diego, CA 92101
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With a copy to:
Daisy Saffir
Branch Manager
Ward North America, LP
2121 70th Avenue West, Suite C
Tacoma, WA 98466
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.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement in
duplicate counterparts as of this .2.0 "h. day of Mareh, 2005.
Ma.y
CITY OF YAKIMA WARD NO H AMERICA P
Title: C
-a-o—oS
Date:
ATTEST:
City Clerk
Resolution No. /2- ao 0 S - S a
Contract No. a 0° 5 — 5 /
8
By:
Name: • ussell A. Whitmarsh
Title: Executive Vice Proident
Date: 3 - 29 -v1
ADDENDUM
TO THE CLAIMS SERVICE AGREEMENT BETWEEN
City of Yakima ("Client")
AND
Ward North America, LP ("WNA")
EFFECTIVE: January 1, 2005 to December 31, 2007
This Addendum serves one purpose:
1) ACMS on-line access two hundred -fifty dollars ($250) per month.
All other terms of the Agreement remain unchanged.
IN WITNESS WHEREOF, the parties have executed this Addendum as of the dates set forth
below.
Ward North
By:
erica, LP
Name: ' ussell Wh tmarsh
Title: Executive Vice President
"Client"
City of Yakima
Date:
By; � Date:
S- "`-3--
Name:
`-3—Name: ` . -A-. "2.0.-ts, Sr
Title: Ce -F),
ATTEST:
2
City Clerk
Resolution No. - a004- - go
Contract No. .2005- 51
BUSINESS OF THE CITY COUNCIL
YAKIMA, WASHINGTON
AGENDA STATEMENT
Item No.
For Meeting Of 5/17/2005
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 three (3) year
service agreement with Ward North America, as the City's third party administrator for our
Self -Insurers Workers compensation Program and ACMS Computer data base on-line access.
The new contract adjusts the fee structure by increasing the charge to process Indemnity
(time loss) claims from $625 to $675 or 8.0 % per claim. The rate for medical -only claims will
be increase from $130 to $140 or 7.7% per claim. Based on previous claims history, the
estimated annual administrative fee to Ward North America, Inc.; is $32,000, 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.
The ACMS Computer data base on-line access service remains the same. The total cost of the
service will be a $250.00 per month access charge, which shall be billed on a quarterly basis,
projecting an annual fixed cost of $3,000 for access charge and in -coming line service.
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, 2005 and end December 31, 2007.
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:
Human Resources/Agenda
Ward North America
Resolution adopted. RESOLUTION R-2005-80