4c
CITY OF GLENDALE, CALIFORNIA
REPORT TO THE CITY COUNCIL
AGENDA ITEM
Report: Amendment to the Professional Services Agreement with Adminsure, Inc.
1.Motion authorizing the City Manager to execute an amendment to the Professional Services Agreement with Adminsure Inc. (#8002129) to provide Third Party Administrator services for Citywide workers’ compensation claims through June 30, 2028, and increase the not-to-exceed amount by $2,590,000.
COUNCIL ACTION
Item Type: Consent Item
Approved for January 27, 2026 calendar
EXECUTIVE SUMMARY
On June 27, 2023, the City Council authorized the City Manager to execute a Professional Services Agreement with Adminsure, Inc. to provide third-party administrator services for the City’s workers’ compensation program.
Workers’ compensation benefits are mandated by State law. Prior to 2016, the City administered all workers’ compensation claims in-house. In 2016, following a competitive Request for Proposals (RFP) process, the City contracted with Adminsure, Inc. to administer claims for Police and Fire employees and to manage future medical care claims for all retired sworn employees. In 2023, following a subsequent RFP process, the City expanded the scope of services to include administration of all City workers’ compensation claims, as well as all future medical care claims.
An indemnity claim is a workers’ compensation claim in which an employee receives wage-replacement benefits (monetary benefits) due to a work-related injury or illness resulting in temporary or permanent disability or death, in addition to medical treatment.
Currently, the monthly cost per indemnity claim administered by Adminsure is $144.41, and the cost per claim for medical-only and future medical claims is $72.20. The City’s current claims inventory with Adminsure consists of approximately 423 indemnity claims, 317 future medical claims, and 36 medical-only claims.
The Human Resources Department is requesting authorization to exercise an option to renew the Professional Services Agreement until June 30, 2028, and increase the not-to- exceed amount by $2,590,000.
24c
6 5
4 1
RECOMMENDATION
That the City Council approve an amendment to extend the professional services agreement with Adminsure, Inc. for an additional two years and increase the not-to- exceed amount by $2,590,000.
ANALYSIS
The Human Resources Department, through its Workers’ Compensation (WC) Division, provides oversight of a Third-Party Administrator (TPA) responsible for managing workers’ compensation claims on behalf of City employees. The TPA plays a critical role in ensuring compliance with State-mandated workers’ compensation requirements, timely claims administration, accurate benefit payments, and effective settlement management.
In 2024, the City’s Internal Audit Division conducted a review of the workers’ compensation disability settlement process, including the Professional Services Agreement with Adminsure, Inc., a sample of Settlement Authorization Requests (SARs), and available data related to workers’ compensation claims. The audit examined multiple claim types, including indemnity claims, future medical claims, and combined indemnity/future medical claims.
An indemnity claim generally involves a work-related injury or illness that results in wage- replacement benefits due to temporary or permanent disability, while future medical claims involve injuries requiring ongoing lifetime medical treatment. Combined indemnity/future medical claims include both wage-replacement benefits and entitlement to future medical care.
The audit concluded that final settlement amounts reflected on the reviewed SARs were accurate and consistent with applicable requirements. No material discrepancies were identified in the settlement calculations or documentation reviewed. The audit also confirmed that the claim types reviewed were administered in accordance with established procedures, providing assurance that the TPA’s claims handling and settlement processes are functioning as intended.
From October 1, 2019 through September 30, 2024, the City resolved a significant volume of workers’ compensation claims across these categories, underscoring the complexity and ongoing nature of the City’s workers’ compensation program. Continued engagement of a qualified and experienced TPA is essential to manage this workload, control costs, mitigate financial risk, and ensure timely and compliant administration of benefits.
Approval of the amendment to the Professional Services Agreement with Adminsure, Inc. will allow the City to maintain continuity of services, address current and projected claims inventory, and ensure sufficient resources are available to support effective claims administration. The amendment is consistent with the audit findings, which demonstrated accurate settlement processing and appropriate oversight, and supports the City’s obligation to administer workers’ compensation benefits in a fiscally responsible and legally compliant manner.
34c
6 5
4 1
For these reasons, approval of the amendment to the Professional Services Agreement is recommended.
Total Number and Amount of Settled Claims from 10/01/2019 to 09/30/2024 *Note, 2019 covers settled claims from 10/1/2019 and 2024 until 9/30/2024.
STAKEHOLDERS/OUTREACH
This action is administrative and relates to the continuation of existing contractual services. As such, no stakeholder outreach was required.
FISCAL IMPACT
The amendment to the Professional Services Agreement with Adminsure will cost a not-to-exceed amount of $2,590,000 through June 30, 2028. The cost for March through June 2026 is approximately $348,000, which was included as part of the FY 2025-26 budget. Therefore, no new appropriation is requested at this time.
Existing Appropriation
Amount Account String Funding Source
$348,000 43110-6140-HRD-5002-P0000 Compensation Insurance Fund
Department Cost Center Program
Human
Resources
Workers Compensation Insurance
The funds for the remainder term of the contract will be included as part of the annual budget process within the Compensation Insurance Fund.
21 68 46 57 45 43
$0.6
$1.5
$0.9
$1.5
$1.4
$1.0
0 40
80 $0
$1
$2
2019* 2020 2021 2022 2023 2024*
Number of Claims Settlement Amount
Millions
Calendar Year
44c
6 5
4 1
ENVIRONMENTAL REVIEW (CEQA/NEPA)
This item is not subject to CEQA review.
CAMPAIGN DISCLOSURE
In accordance with the City Campaign Finance Ordinance No. 5744, the following are the names and business addresses of the members of the board of directors, the chairperson, CEO, COO, CFO, subcontractors and any person or entity with more than 10% interest in the company proposed for the contract amendment in the Agenda Item Report:
Alithia Vargas-Flores, CEO/President
Business Address: 3380 Shelby Street, Ontario CA 91764
ALTERNATIVES TO STAFF RECOMMENDATION
No alternatives are recommended, as the proposed action is necessary to ensure continuity of required services.
ADMINISTRATIVE ACTION
Submitted by:
Paula Adams, Chief Human Resources Officer
Prepared by:
Dania Portillo, Workers’ Compensation Administrator
Approved by:
Roubik R. Golanian, P.E., City Manager
EXHIBITS/ATTACHMENTS
1. Adminsure Inc. Professional Services Agreement, Contract # 8002129
2. Amendment #1 to Adminsure Inc. Professional Services Agreement