1 Public Safety, Finance, and
Strategic Support Committee
Workers’ Compensation
Program Update Annual Report
Human Resources Department
September 15, 2022
Item: (d) 4
Presenters: Jennifer Schembri, Director of Employee Relations/ Director of Human Resources
Eric Fortes, Division Manager
2 Recommendation
Accept the annual report on the City’s efforts
to contain workers’ compensation costs and
reduce claims for the Workers’ Compensation
Program by focusing on wellness, health, and
safety through the end of 2021-2022.
3 Intercare Contract Extension
On June 14, 2022, the City Council authorized
the City Manager to negotiate and execute an
amendment to extend the current Agreement
with Intercare for an additional three years,
through June 30, 2025, and increase the
amount of compensation by $16,618,903 for a
total not to exceed amount of $32,582,834.
4 Intercare Contract Extension
• This amendment to the Agreement allowed
Intercare to continue to provide
comprehensive Workers’ Compensation
services and serve as the City’s Third-Party
Administrator (TPA) to administer all
workers’ compensation claims.
• Staff recommended extending the agreement
with Intercare based on their proven ability to
offer quality, consistent and excellent claims
administration services.
5 Open Claims as of June 30, 2022
The total number of open claims has increased by
approximately 3.4% since June 30, 2021, when the
open claim inventory was 2,489.
Claim Type Number of Open
Claims as of 6/30/2021
Number of Open
Claims as of 6/30/2022
Indemnity 1,412 1,458
Medical Only 85 81
Future
Medical 992 1,036
Total 2,489 2,575
6 COVID-19 Claims through June 30, 2022
FIRE AIRPORT POLICE DOT PRNS ESD LIBRARY TOTAL
Temporary
Disability
(Lost time)
265 2 506 8 10 1 1 793
Medical
Only
3 0 20 0 0 0 0 23
Information
Only (No
treatment)
4 0 236 0 7 3 0 250
Total Paid $902,993 $ 10,081 $980,219 $5,835 $ 0 $ 0 $ 0 $1,899,128 Total
Outstanding $609,408 $ 13,056 $306,282 $ 0 $ 0 $ 0 $ 0 $928,746 7 Workers’ Compensation Total Claims Cost
Department
2021-2022
Budget
(Adopted)
2021-2022
Budget
(Modified)
2021-2022
Actuals
Fire $7,750,000 $9,650,000 $9,461,652
Police $7,750,000 $10,060,000 $10,419,838
PRNS $900,000 $1,545,000 $1,432,480
DOT $300,000 $450,000 $396,759
Others $966,000 $1,416,000 $1,232,330
Public Works (GS) $527,000 $527,000 $417,461
General Fund Totals $18,193,000 $23,648,000 $23,360,520 Special Funds Total $2,007,500 $2,215,000 $902,394
All Funds Total $20,200,500 $25,863,000 $24,262,914
8 General Fund - Workers’ Compensation
Settlements 2021-2022
Fire Police PRNS DOT PW Others Total
Workers’
Comp
Settlements
$1,017,222 $1,718,681 $256,482 $35,550 $56,183 $152,242 $3,236,360 9 AON Actuarial Study - Estimated
Outstanding Losses through June 30, 2022
Valuation Date
(1)
Estimated
Outstanding
Losses
(2)
Case Reserves
(3)
(A) As of 06/30/22 $176,323,736 $120,088,378
(A) As of 6/30/21 $171,991,261 $117,869,882
(A) Change (A)-(B) $4,332,465 $2,218,496
(A) % Change 2% 2%
10 AON Actuarial Study - Projected Ultimate
Losses Changes through June 30, 2022
Claim Period Projected
Ultimate
Losses as of
6/30/2019
Projected
Ultimate
Losses as of
6/30/2022
Change Percentage
Change
FY 13/14 $22,737,000 $21,761,000 ($976,000) -4%
FY 14/15 $23,306,000 $23,201,000 ($105,000) 0%
FY 15/16 $32,335,000 $34,094,143 $1,759,143 5%
FY 16/17 $21,253,000 $20,756,000 ($497,000) -2%
FY 17/18 $27,254,000 $29,678,000 $2,424,000 9%
FY 18/19 $28,977,000 $24,097,000 ($4,880,000) -17%
FY 19/20 $32,593,000 $29,393,000 ($3,200,000) -10%
FY 20/21 $34,242,000 $35,469,000 $1,227,000 4%
FY 21/22 $40,698,000 $38,301,000 ($2,397,000) -5.9%
Total $263,395,000 256,750,143 ($6,644,857) -2.5%
11 Intercare Staffing as of June 30, 2022
Claim Type
Number of
Open Claims
as of
6/30/2022
TPA Employee
Type
Number of
Staff
Average
Caseload
Indemnity,
Medical Only,
Future Medical
2,575 (b)
Senior Claims
Examiner 10 145.8(a)
Future
Medical/Medical
Only Examiner
4 279.3 (a)
Clerical and
Support Staff 5 0
Total 19
(a) Average does not include clerical staff
(b) Claims totals do not include Information Only claims 12 TPA Performance Measures Jul 1, 2021 – Jun 30, 2022
State Compliance Performance Total Claims
Audited Total "Yes" Total "No" Total "N/A" Overall Audit Percentage Score Prior Audit Percentage
Score through 6/30/20
Temporary Disability payment compliance
251 130 0 121 100% 100%
Permanent Disability & Death benefits
payment compliance 251 121 0 130 100% 98%
Subsequent indemnity payment compliance
251 121 0 139 100% 100%
Agreed Medical Examiner/ Qualified Medical
examiner notices compliance 251 181 10 60 96% 94%
Cycle Time Performance
Total Possible
Categories
Audited
Total "Yes" Total "No" Total "N/A" Overall Audit
Percentage Score
Prior Audit Percentage
Score through 6/30/20
Adjuster Technical Audit Performance
Summary 2,008 1,358 50 600 97.5% 96%
Quality Performance Total Claims
Audited Total "Yes" Total "No" Total "N/A" Overall Audit Percentage Score Prior Audit Percentage
Score through 6/30/20
Three-point contacts - Timely completion of 3
Point Contacts. (Pass/Fail) 251 231 12 8 95% 91%
Causation Analysis - Timely causation decision
within 90 days. (Pass/Fail) 251 222 10 19 96% 97%
Plans of Action - Plan of Action in claim notes
every 90 days. (Pass/Fail) 251 208 18 25 93% 92%
Benefits Payments - Timely and accurate
payment of benefits (Pass/Fail) 251 144 0 107 100%
95%
13 Workers’ Compensation Program- Other
• InterConnect Program
• Monthly Claims Reviews
• Quarterly WC Liaison Meetings
• Workers’ Comp 101 Supervisor Training
• Firefighter Fastlane
• Police Fastlane
14 Safety Management System
Health and Safety Program
15 Health and Safety Program
• Program Manager
• Safety Scoreboard
• Quarterly Citywide Safety Committee Meetings
• Ergonomics
• OSHA 10-Hour Certification Training
• STOP (Safety Training Observation Program) for
Supervision
• Wellness
16 Conclusion and Follow-up
• Focus on safety and injury prevention as well as
effectively manage the TPA to reduce injuries and
contain Workers’ Compensation costs.
• Suspended Workers’ Compensation and safety
initiatives will be reestablished when COVID-19 cases
decrease so that Division can refocus on implementing
initiatives.
• Workers’ Compensation expenditures for Fiscal Year
2021-2022 exceeded the Adopted Budget by
$4,062,414, primarily due to the Workers’
Compensation settlements amounting to $3,236,360.
17 Conclusion and Follow-up
• However, the impact of C&R and STIP
settlements over the past 4 years, on Projected
Ultimate Losses reflected a $6,644,857 or a 2.5%
reduction over the past nine fiscal years.
• The Division will continue this strategy of C&R and
STIP settlements to further reduce Projected Ultimate
Losses, as well as reduce open claims inventory.
18 Discussion and Questions