| | | | | | | | | City of Independence | | AGENDA ITEM COVER SHEET |
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| | | | | | | | Agenda Title:
Council action is requested on the approval of the 2023-2024 Excess Workers' Compensation Renewal with an estimated annual cost of $443,368. |
| | | | | | | | Recommendations:
Staff recommends approval. The renewal proposal was reviewed by the Lockton and by Charlesworth Consulting, LLC, the City’s Risk Management consultants.
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| | | | | | | | Executive Summary:
The City’s Workers’ Compensation program is on a self-funded format which requires annual approval of the Missouri Department of Labor/Division of Workers’ Compensation. The City has been using this type funding program for well over 20 years. This is a direct way to control costs in lieu of buying a fully insured insurance program. |
| | | | | | | | Background:
The projected loss rate continues to trend about even on a historical basis using the the past 2 years as a benchmark. This has been achieved by using several factors which include early nurse triage care, strong claims administration and the City’s management/department teams working to get employees well and back to work.
With estimated ratable payroll is up 3% and the overall premium increase is 8%, this is essentially a 5% “rate” increase over expiring policy. Therefore, the total annual premium increasing from $409,949 to $443,368. Since the City’s broker (Lockton) provides services on a contract basis, these premiums are “net” of all commissions.
The City’s broker requested a possible decrease in the City’s Self-Insured Retention (think deductible) from the $1.5M SIR to perhaps $1M SIR, but the insurer was not ready to agree to those discussions. Another key insurer was also approached as they had expressed interest, but they would require a $2M SIR for certain classes (Fire and Police), so that was not pursued further this year. When pulling in all related costs (losses within retention, claims handling/TPA charges, and cost of bond) the total estimated cost per $100 in payroll is essentially flat. Attached is a summary of the estimated total cost for stop loss insurance, claims handling, statutory bond and estimated projected losses. The City’s risk management firm, Charlesworth Consulting, has reviewed and concurred with the renewal recommendation.
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Fiscal Impact:
The fiscal impact to the City is $443,368. The premium will be paid from the City's self-insurance Workers Compensation fund (092) account number 6592-5207. The premium will be passed through to the departments in the 2023-2024 budget based on 2022-2023 claims data for each department (department line item code 5207).
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| | | | | | | | | Department: Human Resources | Contact Person: Adam Norris |
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| REVIEWERS: | | Department | Action | | Finance Department | Approved | | Finance Department | Approved | | City Managers Office | Approved | | City Clerk Department | Approved |
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| Council Action: | Council Action: |
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