REPORT TO THE CITY COUNCIL
September 21, 2017
FROM: JEFF CARDELL, Director
Personnel Services Department
BY: MIKE PAYNE, Risk Manager
Personnel Services Department
SUBJECT
Title
Approve the Fourth Amendment to the Services Agreement Between the City of Fresno and Risico Claims Management Regarding Worker's Compensation Claims and Authorize the Director of Personnel Services to Execute the Amendment
Body
RECOMMENDATION
Staff recommends that the City Council approve the attached Fourth Amendment between the City of Fresno and Risico, Inc. (Exhibit "A") to provide Workers' Compensation third party administration services to the City of Fresno and authorize the Director of Personnel to execute the agreement.
EXECUTIVE SUMMARY
The City's open workers' compensation claims count has risen thereby resulting in the need to expand the staff employed by the third party administrator (TPA) Risico. The additional staff will ensure an equitable distribution of claims and an adequate span of control to ensure the claims are being administered timely and correctly. Since this additional staff is above and beyond what is provided for in the current agreement it is necessary to amend the agreement to increase the annual fee in support of the staffing level.
BACKGROUND
The City has been self-insured for its Worker's Compensation liability since August 1973. To administer the delivery of benefits and ensure compliance with applicable State statutes, the City has utilized the services of a TPA. The City has contracted with Risico (formerly American All Risk Loss Administrators AARLA) since March 2004. The current agreement includes a staffing model that provides 1 Supervisor, 8 claims examiners and 2 claims assistants for an annual fee of $828,000 which is subject to modification based upon required staffing levels.
Due to the volume of claims administered, Risico has increased the number of claims examiners from 8 to 10 without increasing the ...
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