DISCUSSION OF CORVEL ENTERPRISE COMP., INC. WORKERS' COMPENSATION CLAIMS ADMINISTRATION CONTRACT
Staff Contact: Jim Brown, Director, Human Resources & Risk Management
Staff Presenter: Dianne Shoemake, Risk Manager, Human Resources & Risk Management
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Purpose and Policy Guidance
Recommendation
The purpose of this presentation is to discuss and update Council on the CorVel Enterprise Comp., Inc. Workers' Compensation Claims Administration Contract costs and fees.
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Background
The city became self-insured for Workers' Compensation on July 1, 1994 and has excess insurance above $800,000 for each accident. The city uses a third party to administer its claims for employees who, in the course of their employment, incur personal injury, sickness or disease. Claims are handled in accordance with state statutes, Arizona Workers' Compensation Act, Industrial Commission of Arizona rules and regulations and city policies and procedures.
On February 25, 2014 City Council approved awarding the workers' compensation claims third party administration (TPA) contract to CorVel Enterprise Comp., Inc. (CorVel). The contract was effective April 1, 2014 for one-year with the option to renew for an additional four years (see the attached February 25, 2014 City Council Report).
Council approved the five-year total cost of administration fees totaling $102,500. The per item charges for claims expense and claims handling fees were provided to Council but not included in the total contract dollar amount for Council approval. These items are paid when costs are incurred depending on the type of claim filed and the medical care provided. The per item claims expenses and handling fees (and all other medical costs) are included in the Workers' Compensation Trust Fund budget which was approved by Council during the adoption of the FY 2016/17 budget.
Analysis
Staff had requested council approval of only the administrative fees in the CorVel contract at the February 25, 2014...
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