DATE: January 6, 2025
TO: Mayor and Members of the City Council
VIA: Stefan Chatwin, City Manager
FROM: Diane Pitman, Administrative Services Director
DEPARTMENT: Administrative Services
SUBJECT: REQUEST FOR PROPOSAL FOR A WORKERS'
COMPENSATION THIRD-PARTY ADMINISTRATOR
RECOMMENDATION
It is recommended that the City Council of Foster City adopt a resolution approving the issuance of the attached Request for Proposals (RFP) for a Workers' Compensation Third-Party Administrator.
EXECUTIVE SUMMARY
The City’s current Workers’ Compensation claim administration is handled by Cities Group Joint Powers Authority (Cities Group). It is recommended that Foster City withdraw from the Cities Group and administer Workers’ Compensation through a third- party administrator. The costs of these services will be included in the budget for Fiscal Year 2025-2026.
BACKGROUND/ANALYSIS
Foster City joined Cities Group in 1978 to provide third party administration for workers’ compensation claims. Currently Cities Group administers claims for Atherton, Half Moon Bay, Hillsborough, San Carlos, Dublin and Foster City. After a year of reviewing the administration of Workers’ Compensation claims for Foster City, it is recommended that Foster City withdraw from the Cities Group and hire an independent third-party administrator. This new administrator will ensure that Human Resources staff are involved in employee claims processing, that claims are approved or denied in a timely
manner, employees receive medical care and treatment so that they can return to work, and that any claim litigation or settlements are handled by the City. Currently, Cities Group handles any litigation without input from Foster City. Withdrawing from Cities Group and working with a third-party administrator would also provide the City Council the opportunity to approve any settlements over $50,000 which is best practice.
California Environmental Quality Act
Not Applicable
FISCAL IMPACT
There are no costs associated with the issuance of the RFP. Once the proposals have been reviewed and a third-party administrator has been selected, the contract will be brought to the City Council for approval. The estimated annual cost for the third-party administrator services is between $100,000 to $120,000 and will be included in the budget for Fiscal Year 2025-2026.
CITY COUNCIL VISION, MISSION, AND VALUE/PRIORITY AREA
Staff Empowerment and Operational Excellence
ATTACHMENTS:
Attachment 1 - Resolution
Attachment 2 - Request for Proposal