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Home My WebLink AboutMINUTES - 06021987 - 1.87 BOARD OF SUPERVISORS FROM: Phil Batchelor, County Administrator Contra June 2, 1987 Costa DATE* County SUBJECT: Workers ' Compensation Claims Management Program SPECIFIC REQUEST(S) OR RECOMMENDATION(S) & BACKGROUND AND JUSTIFICATION RECOMMENDATION• 1. Approve establishment of an in-house workers' compensation claims management program. 2. Approve the addition of seven positions to the Risk Management Division in the County Administrator' s Office: Two Senior Claims Adjusters, two Claims Adjusters,. two Clerks -, Experienced Level and one Clerk - Beginning Level, and reclassification of Clerk-Senior Level (Lead Specialist) to Supervising Clerk, and Workers' Compensation Insurance Officer to Workers' Compensation Claims Manager. 3. Approve the allocation of funds from the Workers' Compensation Trust Funds to reflect the above action. REASONS FOR RECOMMENDATION: 1. Improved workers' compensation benefit delivery system to the County' s injured workers. 2. Increased control over the management of the workers ' compensation claims program. 3 . Increased control over escalating costs in workers' compensation claims and litigation expenses. 4. Reduced costs through having the County administer the program in-house. FINANCIAL IMPLICATIONS: A reduction in General Fund costs for administration is anticipated. Costs for the positions and program would be funded from the workers' compensation trust funds. Savings in administrative costs would accrue to the trust funds. BACKGROUND: Contra Costa County has self-insured its workers' compensation program since July 1, 1977 . The claims have been handled by three different claims CONTINUED ON ATTACHMENT: X YES SIGNATURE: RECOMMENDATION OF COUNTY ADMINISTRATOR RECOMMEN ION OF B RD COMMITTEE APPROVE OTHER SIGNATURE(S)' ACTION OF BOARD ON JUN 2 198/ APPROVED AS RECOMMENDED _ OTHER VOTE OF SUPERVISORS -Z„�- 1 HEREBY CERTIFY THAT THIS IS A TRUE X UNANIMOUS (ABSENT AND CORRECT COPY OF AN ACTION TAKEN AYES: NOES: AND ENTERED ON THE MINUTES OF THE BOARD ABSENT: ABSTAIN: OF SUPERVISORS ON THE DATE SHOWN. CCCAO Risk Management ATTESTED JUN 2 1987 : g PHIL BATCHELOR, CLERK OF THE BOARD OF SUPERVISORS AND COUNTY ADMINISTRATOR M382/7-83 BY �' �{,/ ,DEPUTY 5 administrators since that time. The present administrator is Public Agency Claims Service in, Walnut Creek. The County had an audit of its risk management program by the Wyatt Company in September, 1985. The Wyatt Company, a risk management consulting firm, recommended that the County bring the complete workers' compensation claims function in-house as part of the Risk Management Department. In February, 1985, North Bay Associates, a claims auditing firm, completed a comprehensive claims audit. In their overall summary, they concluded the County should make a decision regarding establishment of in-house administration due to its heavy involvement in claims matters. North Bay Associates submitted its latest claims audit on February 14, 1987 . They again suggest the County handle its claims in-house or significantly limit its involvement in decision-making processes. They further state the major problem with the present claims administrator is lack of management direction and control. With the claims in-house, the program would be managed by the County' s Workers' Compensation Insurance Officer. There would also be a reduction in the current duplication of effort between Risk Management and the outside administrator. Improved employee relations would also result due to better coordination of workers' compensation and other insurance benefit programs. Staff concurs with the recommendations of the Wyatt Company and North Bay Associates on adjusting the County' s workers' compensation claims in-house. It is recommended the Board authorize hiring two Senior Claims Adjusters, two Claims Adjusters, two Clerks - Experienced Level, and one Clerk - Beginning Level and approve the reclassification of Clerk - Senior Level (Lead Specialist) to Supervising Clerk, and Workers' Compensation Insurance Officer to Workers' Compensation Claims Manager. (See -Exhibit A - organization chart. ) The function of this program will be to: o Oversee the entire claims program including salary clearances. o Evaluate and manage claims. o Attend settlement conferences on behalf of the County. o Monitor and direct legal defense. o Provide faster resolution of claims. COST ANALYSIS- In 1986, the County paid Public Agency Claims Services $312,997 for claims adjusting services. The contract for 1987 is for $355,008 . The projected savings to the County after the first year phase-in period are estimated to be approximately $100,000 per year. ( See the attached analysis - Exhibit B. ) In addition to the savings in administrative costs, the major savings resulting from in-house administration would be increased direction and control over those dollars spent in providing workers' compensation benefits. CONSEQUENCES OF NEGATIVE ACTION: If the Board does not approve establishment of the in-house workers' compensation claims program, it will result in increased costs, reduced control over those costs and less effective control over workers' compensation claims. EXHIBIT A WORKERS' COMPENSATION CLAIMS ADMINISTRATION PROGRAM ORGANIZATIONAL CHART Risk Manager Workers' Compensation Claims Manager Claims Adjusters Clerical Vocational Rehabilitation ' 2 ) *Sr. Claims Adjuster ( 1) Clerk-Supervising ( 1) Clerk-Sr. Level ( 1/2) Industrial 2) *Claims Adjuster ( 2) *Clerk-Experienced Level Counselor ( 1) *Clerk-Beginning Level ( 1/2) Non-Industrial Counselor * New position total seven EXHIBIT B Present Cost of Administering Workers' Compensation Program Year One Year Two & There- after (+ 5%) Present Cost of Full-Time Staff in Workers' Compensation ( Salary & Benefits) $115,490 $121,265 Budgeted Expenses 35,050 36, 803 Third party administrator 355,000 372,750 Total $505,540 $530,818 Projected Cost of In-House Program Cost of Full-time Staff in Workers ' Compensation (Salary & Benefits) plus Budgeted Expenses $150,450 $157,973 Additional Staffing 243,409 255,579 Supplies/Printing/Space 15,000 7,500 Travel/Training 5,000 5,250 Furniture/Equipment, Start-up costs 20, 000 Computer 30,000 2,500 $463, 859 $428,802 Difference/Savings $ 41,681 $102,016 to the County POSITION ADJUSTMENT REQUEST No. /'y.3 7.Z Date: 5/28/76 Dept. No./ Copers Department CAO/Risk Management Budget .Unit No. 0003 Org. No. 1220 Agency No. Action Requested: SEE ATTACHMENT Proposed Effective Date: 6/1/37 Explain why adjustment is needed: To establish classifications and classify positions necessa for the implementation of the County's in-house Workers' ompensa ion Claims Adjustment Program. Classification Questionnaire attached: Yes No Estimated cost of. adjustment: $ 243 409 Cost is within department's budget: Yes ® No ost for Program and positions to be funded from Workers' Compensation Trust Fund. If not within budget, use reverse side to explain how costs are to be funded. Department must initiate necessary appropriation adjustment. Use additional sheets for further explanations or comments. for DepartAknt Head Personnel Department Recommendation Date: 5/28/87 Establish the Class of Workers' Compensation Claims Adjuster (AJWE) and allocate to the basic salary schedule at salary level C5-1729 ($2559-3111); Classify one position. Establish the Class of Senior Workers' Compensation Claims Adjuster (AJTC) and allocate to the basic salary schedule at salary level C5-1790 ($2720-3306); Classify two positions. Establish the class of Workers' Compensation Claims Manager (AJDJ) and allocate to the basic salary schedule at salary level C5-2033 ($3468-4215). Establish fkr positions of Clerk-Experienced Level (JWXB). Reclassify person and position of Clerk Specialist Level (JWXD), position #00261 to Workers' Compensation Claims Adjuster (AJWE). Amend Resolution 71/17 establishing positions and resolutions allocating classes to the Basic/Exempt Salary Schedule, as described above. Effective: p day following Board action. [► 6/1187- -- ate for Director of s ne CountyAd inistrator Recommendation Date: Approve Recommendation of Director of Personnel D Disapprove Recommendation of Director of Personnel E3 Other: Tf__or7_CountMj Administrator Board of Supervisors Action JUN 2 1987 Phil Batchelor, Clerk of the Board of Adjustment APPROVED/ on Supervisors and County Administrator Date: JUN 21987 By: APPROVAL OF THIS ADJUSTMENT CONSTITUTES A PERSONNEL/SALARY RESOLUTION AMENDMENT. 7300 M347 6/82 t ATTACHMENT "A" Establish the Class of Workers' Compensation Claims Adjuster (AJWE) and allocate to the basic salary schedule at salary level C5-1729 ($2559-3111); Classify one position. Establish the Class of Senior Workers' Compensation Claims Adjuster (AJTC) and allocate to the basic salary schedule at salary level C5-1790 ($2720-3306); Classify two positions. Establish the class of .. Workers' Compensation Claims Manager (AJDJ) and allocate to the basic salary schedule at salary level C5-2033 ($3468-4215). Establish four positions of Clerk-Experienced Level (JWXB). Reclassify person and position of Clerk- Specialist Level (JWXD), position #00261 to Workers' Compensation Claims Adjuster (AJWE). 3