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HomeMy WebLinkAbout111014_cabs01w. County Administrator's Briefing Session Commissioners Office JEFFERSON COUNTY BOARD OF COUNTY COMMISSIONERS AGENDA REQUEST TO: Board of County Commissioners Philip Morley, County Administrator FROM: Erin Lundgren, Clerk of the Board/Human Resources Manager DATE: November 10, 2014 SUBJECT: Discussion re: Participation in the Association of Washington Cities Workers' Compensation Retrospective Rating Program STATEMENT OF ISSUE: For several years Jefferson County has participated in the sponsored Washington State Association of Counties (WSAC) Select Retro Pool and Workplace Safety Alliance. WAC 296 -17B regulates retrospective rating for workers' compensation insurance. Retrospective rating (retro) is a voluntary financial incentive program offered by the Department of Labor and Industries to encourage improvements in workplace safety. Participating in retro creates an opportunity to earn refunds of required premium payments. However, participation involves risk because additional premiums can be assessed when participants are not successful in controlling losses. Employers control losses by preventing workplace illnesses and injuries, and helping injured workers return to work. If a sponsored group receives a net assessment for two consecutive coverage periods, the group is placed on probationary status. If a sponsored group receives a net assessment in the following coverage period, that group will be denied future enrollment and the sponsoring organization will not be allowed to sponsor another group in the same industry category for the five years following the third coverage period with a net assessment. Members of the WSAC Select Retro Pool and Workplace Safety Alliance meet annually to review the retro plan and decide whether or not to reenroll in the program. In the past, the WSAC Retro group has received refunds, as well as net assessments. However, in the last two consecutive coverage periods the WSAC Retro group received net assessments and the group anticipates a third consecutive assessment. During the annual WSAC Retro group meeting earlier this year is was decided that the group would not continue pooling. As a result, WSAC terminated its contract with Sedgwick, which is the agency that provides retro pool services and L &I claims administration services to the member Counties participating in the WSAC Retro group. The termination of the contract with Sedgwick is effective December 15, 2014 and Jefferson County will no longer have claims administration services through Sedgwick as of that date. ANALYSIS: WSAC has been working with the Association of Washington Cities (AWC) on a proposal for AWC to provide retro program services to WSAC member counties. In September, a final proposal was agreed to by County Administrator's Briefing Session Commissioners Office both WSAC and AWC. AWC's Retro Program Manager Brian Bishop is conducting meetings with WSAC member counties to discuss interest in AWC's services and pool. He has provided the attached information about AWC's retro program for Jefferson County to consider and is available to discuss the program and answer any questions. RECOMMENDATION: The Board is being asked to provide direction to staff on whether the County is interested in participating in AWC's Retro Program pool, and claims administration services, or whether the County is interested in participating in AWC's claims administration services only. Upon direction from the Board, staff will work with AWC representatives on processing participation agreements that will be submitted to the Board for approval at a future meeting. REVIEWED BY: P i ip Morl 'y, or Date Washington State Association of Counties October 30, 2014 TO: WSAC Retro Pool & Safety Alliance Members FROM: Eric Johnson, Executive Director SUBJECT: Closure and Transition of the Pool and Alliance ISSUE WSAC staff and the Executive Committee of the Select Retrospective Rating Program and the County Workplace Safety Alliance (also known as the WSAC Retro Pool) have been actively analyzing the program's future. Representatives of Counties and entities that participate in WSACs' Select Retrospective Rating Program and the County Workplace Safety Alliance Program have met several times over the course of the last year to consider a wide range of alternatives that could impact the programs future including closing the program, merging with another pool, contracting for third party claims administration only to a complete revamping of the existing pool. For three straight Retro Pool years, (2010 $263,098, 2011 $214,587, and 2012 $206,699) WSACs' Retro Program has had a premium assessment to member counties. Putting it as succinctly as possible, claims were greater than premiums, causing a "premium assessment ". RCW 51.18.050 clearly states that if a: "retrospective rating group is required to pay an additional net premium assessment in the third consecutive coverage period, that group shall be denied future enrollment in the state's retrospective rating plan. In addition, the sponsoring entity of the failed group may not sponsor another group in the same business or industry category for five coverage periods from the ending date of the failed group's last coverage period." WSAC has been advised by representatives of the Department of Labor and Industries that they are monitoring and aware that the WSAC Retro Pool is in the third year assessment status and is currently considered on probation until the 2012/2013 pool year closes in 2016. BACKGROUND Washington's Counties have two alternatives for workers compensation costs in the state of Washington. One is self- insurance and the other is state funded insurance. A self- insured entity is responsible for paying dollar - for- dollar the total cost of any claim. Entities in the state funded insurance plan pay a quarterly premium to the Washington State Department of Labor and Industries (L &I) to cover the insurance for employees workers compensation claims. Only entities participating in the state funded insurance program have an opportunity to participate in a Retrospective Rating Pool Plan ( Retro). Counties Retro Pool Retrospective Rating ( Retro) Plans are an optional program offered by L &I to allow employers the ability to recapture a portion of their workers compensation premiums. All retro plan rules and regulations are provided for in RCW 51 and WAC 296 -17b and are administered by the Department of Labor and Industries. The Washington State Association of Counties (WSAC) offers a Retro Plan that can reward member counties, special districts, cities and Regional Support Networks for maintaining a safe workplace and controlling workers' compensation costs. Depending on the plan year, if the group's claims costs are low, participants in that year can recoup refunds of premiums paid to L &I. However, if the group's claims costs are high, additional premiums may need to be paid to L &I. Since its inception in 1986, the WSAC Retro Plan members have received more than $4.9 million in refunds from L &I - an average of 10% of the group's standard premiums. It was generally believed by WSAC Retro Program members that the WSAC Retro Plan would continue to grow and provide ongoing savings for participating members. However, for a relatively small pool this may not be true and in fact under new guidelines, may not be possible. County Workplace Safety Alliance (CWSA) The CWSA allows members to realize the benefits of claims management and loss prevention services through a group purchase. Some counties opt out of the Retro Plan but utilize CWSA services to improve workplace safety and reduce costs. Other members use the services of CWSA to help them reduce losses and re- qualify for retro plan years and potential refunds. CWSA membership was a requirement for any employer wishing to participate in the WSAC Retro Plan. Historic Member Benefits • Protection of Group Participation. The Retro Plan has reduced risk by establishing a reserve account to help offset assessment years. • Training is offered at no extra cost to members and is available on -site and at regional meetings throughout the year. • Conferences. The WSAC Retro Program offers an annual conference each year to members at no additional fee. The conference offers members an opportunity to network and share ideas, participate in training, as well as hear industry experts discuss current labor and industries issues. • Program Coordinator. Washington State Association of Counties employs a Retro Program Coordinator to liaison between member agencies and the Department of Labor and Industries. The Coordinator provides current news updates and serves as a resource for member questions. • Promoting safe work environments to minimize accidents and injuries; • Encouraging early return -to -work efforts; • Serving as a forum for developing and sharing best practices and for purchasing services to promote safety and reduce costs; • Claims management services; • Speeding the processing of claims /payments to employees; • Preventing abuse of the program; and • Providing customized training to members based on their work environments. Financial Aspects Members pay an enrollment and service fee of 6 percent of their quarterly L &I premiums to a third -party administrator (Sedgwick Claims Management Services) to participate in both the CWSA and the Retro Pool. This fee is in addition to the workers compensation premium paid to L &I. As of May, 2014 all funds available in the Retro reserve account were expended to pay for most of the 2012 assessment balance. The remaining balance was billed to the members of that pool year. The pool currently has a zero balance. ACTIVITY LEADING UP TO CLOSURE As part of the annual Goals and Actions for 2013, WSAC initiated an RFP for administrator services for its Retro Program. In identifying potential vendors, WSAC staff, with the input from Retro Program Advisory board members, approached the Association of Washington Cities with the potential to provide Retro program services to WSAC, including merging or assuming WSACs' Retro Program. On March 24, 2014, WSAC staff met with AWC staff to receive and review a proposal for AWC to assume Counties Select Retrospective Rating Program and County Workforce Safety Alliance and in turn, briefed WSAC Retro Pool Executive Committee members. On May 13, 2014, WSAC retro pool members met to receive a presentation from Association of Washington Cities' staff. After discussion, WSAC Retro Pool members provided a counter proposal to AWC for consideration which, in general was accepted by AWC. On August 8, 2014, WSAC received notification from AWC that their Retro Board had agreed, with certain parameters, to assume the Counties Select Retrospective Rating Program and County Workforce Safety Alliance. On September 3, 2014, representatives of the WSAC Retro Program Counties concurred that accepting the AWC proposal was in the best interest of the Counties, and to recommend to the WSAC Board of Directors to initiate termination of the WSAC Retro Pool and Safety Alliance, and complete negotiations with AWC to transition member counties interested in services to AWC. On September 19, 2014, the WSAC Board of Directors concurred with the program members and voted to initiate termination of the WSAC Retro & Safety Alliance Program and directed WSAC staff to work with the Association of Washington Cities to transition member counties interested in their services and pool. Washington State Association of counties Resolution # 2014 -24 WHEREAS, The Washington State Association of Counties has managed a Select Retrospective Rating Program and the County Workplace Safety Alliance Program to benefit member counties since 1986; and WHEREAS, Since 1986, the Select Retrospective Rating Program provided over $4.8 million in refunds; and WHEREAS, For three straight Retro Pool years, (2010 $263,098, 2011 $214,587, and 2012 $206,699) WSACs' Retro Program has had a premium assessment to member counties, and WHEREAS, RCW 51.18.050 clearly states: "retrospective rating group is required to pay an additional net premium assessment in the third consecutive coverage period, that group shall be denied future enrollment in the state's retrospective rating plan. In addition, the sponsoring entity of the failed group may not sponsor another group in the same business or industry category for five coverage periods from the ending date of the failed group's last coverage period. "; and WHEREAS, WSAC staff, with the input from Retro Program Advisory board members, approached the Association of Washington Cities with the potential to provide Retro program services to WSAC, including merging or assuming WSACs' Retro Program; and WHEREAS, The Association of Washington Cities (AWC) has provided the proposed framework for assuming WSACs' Select Retrospective Rating Program and the County Workplace Safety Alliance Program; and WHEREAS, representatives of counties participating in the WSAC Select Retrospective Rating Program and the County Workplace Safety Alliance Program Retro Program recommend accepting the AWC proposal and recommend to the WSAC Board of Directors to initiate termination of the WSAC Select Retrospective Rating Program and the County Workplace Safety Alliance Program and complete negotiations with AWC to transition member counties interested in services to AWC. NOW THEREFORE, BE IT RESOLVED, that the WSAC Board of Directors approve the termination of the WSAC Select Retrospective Rating Program and the County Workplace Safety Alliance Program; and BE IT FURTHER RESOLVED, that the WSAC Board of Directors direct staff, working with the advice of the Retro Program officers, complete negotiations with AWC to transition member counties interested in services to AWC; and BE IT FURTHER RESOLVED, the WSAC Board of Directors authorizes the Association of Washington Cities to assume all rights to the use of the "Safety Alliance" name for agreed upon period and cost; and BE IT FURTHER RESOLVED, the WSAC Board of Directors express our sincere appreciation to the Association of Washington Cities for their partnership and cooperation. Approved by the Board of Directors of the Washington State Association of Counties on September 19, 2014 Helen Price Johnson, WSAC President S hanie Wright, WS C Secretary Treasurer Washington State Association of Counties October 15, 2014 Clark Coyer Vice President Client Services Sedgwick CMS 220 W Mercer St, Ste W 300 Seattle, WA 98119 Dear Mr. Coyer: This letter serves as the Washington State Association of Counties' official 60 -day termination notice of the Service Agreement for Administration of A Claims Program, effective December 15, 2014. Per section 6c of the agreement, I am requesting the following to close out the contract and transition outstanding items back to WSAC: Hard copy files and /or electronic files maintained by Sedgwick CMS for qualified claims organized by member. Hard copy files and /or electronic files maintained by Sedgwick CMS for the retrospective rating program. WSAC is disbanding the Retrospective Rating Program and Safety Alliance effective December 15, 2014. Therefore, responsibility for the elements contained within the scope of work after December 15, 2014 will be transferred back to respective program members. On behalf of WSAC and the members of the Retro Program and Safety Alliance, I would like to thank Sedgwick for administration of this program since July, 2004. The retro program is clearly in difficult times wish you the best as you meet the challenges ahead. Sincerely, Y Eric Johnson Executive Director Cc: Karlyn Shannon, WSAC Casey Sparber, Sedgwick Retrospective Rating and Safety Alliance Program Members: Asotin County, Columbia County, Douglas County, Ferndale School District, Franklin County, Garfield County, Grays Harbor County, Jefferson County, Klickitat County, Lincoln County, Mason County, Okanogan County, Pacific County, Pend Oreille County, Skagit Conservation District, Skamania County, Thurston County, Tacoma Pierce County Health District, Wahkiakum County, and Whitman County Washington Counties Building 1 206 Tenth Ave SE I Olympia, Washington 98501 -1211 1 Phone: 360.753.1886 1 Fax: 360.753.2842 www.wacounties. orQ /wsac It's all about service In April 2013, AWC's Retro program took administration in- house. We work with you to reduce the frequency and severity of workplace injuries, and we help you get your injured employees back to work quickly. • Complete management of all LEtI claims • On site loss control and risk management consultation • Assistance with safety programs and incident review • Online access to all materials relating to your individual city /town LEtI claims • Free regional trainings and Certified Safety Coordinator Program • Management of return to work or light duty programs • Potential premium refund management and distribution Building on success Members in AWC's Workers' Comp Retro Program have seen positive results with their retro premium refunds from the state. We are building on this success by continuing to focus on injury prevention, claims management, and annual member training. Cost savings Sometimes, having someone help you is just what you need. In just nine months of 2014, the Retro team has helped AWC Retro members receive over $600,000 in reimbursements from L&I's Stay at Work program. And we're just getting started! Governed by cities Seven employees from member cities comprise AWC's Retro Advisory Committee. They provide input on the operations of the program. The AWC Board of Directors Executive Committee is the final decision making body for the Retro program. Member training Ensuring your workplace is as safe as it can be is essential. AWC's Retro program gives members the training they need to get and keep things safe. Our Retro Safety Academy is offered throughout the year, and it's free for members. Upcoming dates include: • October 23, Marysville October 24, Olympia Management's role in safety, How accidents happen, Safety audit Et hazard assessment • November 13, Marysville November 14, Olympia Leading safety discussions, Accident investigation, Preparing for a DOSH inspection • December 11, Marysville December 12, Olympia Office ergonomics Et safety, Leverage your lift, Safety committees Working for you AWC Retro staff provides members with the very best in safety training, loss control, and claims management. Find out how we can help you save on your LEtI costs and potentially qualify for premium refunds. M'.��.:� 1076 Franklin Street SE, Olympia, WA 98501 1- 800 - 562 -8981 • 360 - 753 -4137 ro k awcnet.ori;/retro o