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HomeMy WebLinkAboutMINUTES - 06211988 - 1.85 . TO: . , BOARD OF SUPERVISORS Contra FROM: Harry D. Cisterman, Director of Personnel CCooto DATE: June 3, 1988 County SUBJECT: Long Tern Disability program SPECIFIC REQUEST(S) OR RECOMMENDATION(S) & BACKGROUND AND JUSTIFICATION RECOMMENDATION: • Approve establishment of a self-administered long term disability claims management program. • Assign claims administration to the County Personnel Department - Benefits Division. REASONS FOR RECOMMENDATION: • Increased control over the administration and claims management of the long term disability program. • Reduced costs by eliminating Third Party Administrator fees. • Improved benefit delivery system to claimants. FISCAL IMPACT The County Personnel Department - Benefits Division staff is directly involved in monitoring, auditing and assisting the third party administrator in the handling of the Long Term Disability Program. Since the third party administrators historically have leaned on the benefits staff expertise, the County would save third party administrator costs by self-administering this program. The current contract provides for payment to Associated Claims Management, Inc. of $5000. per year for claims adjusting. In addition to this cost, the County must provide a,-Senior Insurance Analyst plus clerical, support to coordinate and direct this program. . J CONTINUED ON ATTACHMENT: YES SIGNATUR RECOMMENDATION OF COUNTY ADMINISTRATOR RECOMMENDATION OF BOARD COMMITTEE APPROVE OTHER SIGNATURE(S) ACTION OF BOARD ON JUN Z I 19MB APPROVED AS RECOMMENDED X OTHER VOTE OF SUPERVISORS X UNANIMOUS (ABSENT /�— ) , I HEREBY CERTIFY THAT THIS IS A TRUE AYES: NOES: AND CORRECT COPY OF AN ACTION TAKEN ABSENT: ABSTAIN: AND ENTERED ON THE MINUTES OF THE BOARD Originating Dena,rtment; personnel OF SUPERVISORS ON_T_H 2 DATE SHOWN. Benefits Division JUN 1 1988 CC: County Administrator ;ATTESTED Auditor .Controller Ph1 Batchelor,Clerk of the®oard of Supervisors and County Administrator M382/7-83 BY rG4M� DEPUTY Board of Supervisors June 3, 1988 Page Two BACKGROUND: The County has self-insured its long term disability program since August 1, 1980. Claims adjusting has been handled by four different claims administrators since that time. The present administrator is Associated Claims Management Inc. in Walnut Creek who has notified the County they wish to cancel their contract for claims administration as of July 1, 1988. Historically, the claims administrator for long term disability was picked in concert with the workers' compensation program. Since the workers' compensation program went self-administered in October 1987, there is less financial incentive for the third party administrator to continue the contract without significantly increasing their fees to cover staff time and profit margin. The establishment of a self-administered program will decrease the duplica- tion of effort between the benefits division staff and the third party administrator. Additional staffing is not needed for this program because the benefits division staff currently assigned is most familiar with the program and would continue to handle the claims process. The program would be managed by the Employee Benefits Manager. CONSEQUENCE OF NEGATIVE ACTION: If the Board does not approve establishment of a self-administered program, the County will need to contract with a new administrator at an anticipated higher cost.