HomeMy WebLinkAbout2019-06-12 e-packet@7:01Wednesday, June 12, 2019
7:01 PM
City of South San Francisco
P.O. Box 711 (City Hall, 400 Grand Avenue)
South San Francisco, CA
Municipal Services Building, Council Chambers
33 Arroyo Drive, South San Francisco, CA
Special City Council
Special Meeting Agenda
June 12, 2019Special City Council Special Meeting Agenda
NOTICE IS HEREBY GIVEN, pursuant to Section 54956 of the Government Code of the State of
California, the City Council of the City of South San Francisco will hold a Special Meeting on Wednesday, June
12, 2019, at 7:01 p.m., in the City Council Chambers, Municipal Services Building, 33 Arroyo Drive, South
San Francisco, California.
Purpose of the meeting:
Call to Order.
Roll Call.
Agenda Review.
Public Comments - comments are limited to items on the Special Meeting Agenda.
ADMINISTRATIVE BUSINESS
Report regarding a resolution approving an agreement with Athens Administrators for
worker’s compensation claims administration services for a total amount of $620,977
for July 1, 2019 through June 30, 2022. (Leah Lockhart, Human Resources Director)
1.
Resolution approving an agreement with Athens Administrators for worker’s
compensation claims administration services for a total amount of $620,977 for July 1,
2019 through June 30, 2022.
1a.
Adjournment.
Page 2 City of South San Francisco Printed on 8/14/2019
City of South San Francisco
Legislation Text
P.O. Box 711 (City Hall, 400
Grand Avenue)
South San Francisco, CA
File #:19-496 Agenda Date:6/12/2019
Version:1 Item #:1.
Report regarding a resolution approving an agreement with Athens Administrators for worker’s compensation
claims administration services for a total amount of $620,977 for July 1,2019 through June 30,2022.(Leah
Lockhart, Human Resources Director)
RECOMMENDATION
It is recommended that Council adopt a resolution approving an agreement with Athens Administrators
for worker’s compensation claims administration services for a total amount of $620,977 for July 1,2019
through June 30, 2022.
BACKGROUND
The City of South San Francisco is a self-insured employer for worker’s compensation claims,up to a self-
insured retention (SIR)of $500,000.In order to maintain an effective and compliant claims administration
program,the City contracts with a third-party administrator (TPA)for claims administration.For this service,
the City has contracted with Tristar Risk Management since 1987,with service agreement renewal on a year-to-
year basis.In 2018,the City experienced a significant rate increase,in part due to substantial increase in open
worker’s compensation claims.In order to ensure the City maintained a cost-effective program with a high
service level,staff sought to review other options for third-party administrators prior to recommending renewal
of the City’s current agreement for 2019-2020.
DISCUSSION
A request for proposals (RFP)was issued in March 2019 for a three-year contract beginning July 1,2019 with
the option to renew for two additional one-year periods.A total of six proposals were received and reviewed by
Human Resources staff (Human Resources Director,Human Resources Manager,and Human Resources
Analyst).Proposals were evaluated based on the degree to which the proposals met the stated requirements of
the City,resulting in a short list of four proposers for further consideration.The short list of proposers
included:
Athens Administrators
Intercare Holdings Insurance Services
Tristar Risk Management
York Risk Services Group
A panel presentation and interview was conducted on May 17,2019.Internal panelists included City employees
holding the positions of Human Resources Manager,Financial Services Manager,Administrative Police
Lieutenant,and Deputy Fire Chief.External panelists included a Senior Human Resources Analyst (City of
San Mateo)and a Principal Worker’s Compensation Analyst (City of Redwood City).As a result of this
process,Athens Administrators ranked first overall based on the rater dimensions of experience,customer
service,claim management,additional services,and pricing/value.A breakdown of total scores by dimension
is included as Table 1,and a breakdown of total score by panelist is included as Table 2 (Attachment A).A
reference check was conducted by the Human Resources Director,and favorable feedback for Athens
Administrators was provided by all listed references.
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File #:19-496 Agenda Date:6/12/2019
Version:1 Item #:1.
Athens Administrators has significant experience with cities and other public agencies,with 60%of current
clients within the public sector.During the panel process,Athens demonstrated an understanding of the unique
needs of public employees including public safety personnel,an emphasis on communication and customer
service,and sound strategies for expediting services while maintaining appropriate cost-control standards
within State guidelines.Athens maintains an in-house information system,which allows for web-based claim
reporting,flexible configuration for staff access,and sophisticated reporting and analytical tools to evaluate
claim trends and costs.In addition,Athens maintains a high client retention rate and low staff turnover rate,
which is important for maintaining continuity of assigned claims adjusters.Some of the additional services
available to enhance customer service include on-site Worker’s Compensation 101 training for managers and
supervisors and text alert system for injured workers to receive claim updates,and a 1-800 number for injured
employees to access advice from a registered nurse when injured on the job.
FISCAL IMPACT
The service fee for Athens Administrators is $196,052 for fiscal year 2019-2020,$201,933 for fiscal year 2020-
2021,and $207,991 for fiscal year,plus an annual administration fee of $5,000,bringing the total three-year
cost to $620,977.As the second-lowest cost proposer,Athens’fees are approximately 12%higher than
proposed by the City’s current TPA,however,also this includes a commensurately higher level of designated
claims staff.Managed care services,which are charged directly to the cost of the claim,are comparable to the
City’s current rates.The total cost of services is within the City’s projected estimates and will be included in
the proposed self-insurance budget for 2019-2021.
RELATIONSHIP TO STRATEGIC PLAN
The City’s worker’s compensation program supports the City’s strategic priorities of Workforce Development,
by ensuring injured employees are supported in their recovery and return to work,and Fiscal Sustainability by
ensuring that claims are evaluated appropriately and that medical treatment and benefits are provided to injured
workers in a cost-effective manner.
CONCLUSION
It is recommended that Council adopt a resolution approving an agreement with Athens Administrators for
worker’s compensation claims administration services to support the City’s ongoing efforts to improve services
to employees while containing costs.
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ATTACHMENT A
Worker’s Compensation Third-Party Administrator RFP
Panel Scoring Summary
Table 1
Scoring Summary by Rater Dimension
Dimension Athens Intercare Tristar York
Experience 53 49 43 48
Customer Service 52 51 38 48
Claim Management 49 51 41 48
Other Services 50 47 36 47
Pricing and Value 48 47 47 44
Total (300 pts possible)252 245 205 235
Table 2
Scoring Summary by Panelist
Panelist Athens Intercare Tristar York
Panelist #1 40 41 35 38
Panelist #2 42 43 37 43
Panelist #3 42 41 32 39
Panelist #4 42 40 32 34
Panelist #5 42 40 35 39
Panelist #6 44 40 34 42
Total (300 pts possible)252 245 205 235
City of South San Francisco
Legislation Text
P.O. Box 711 (City Hall, 400
Grand Avenue)
South San Francisco, CA
File #:19-497 Agenda Date:6/12/2019
Version:1 Item #:1a.
Resolution approving an agreement with Athens Administrators for worker’s compensation claims
administration services for a total amount of $620,977 for July 1, 2019 through June 30, 2022.
WHEREAS, the City of South San Francisco is a self-insured employer for worker’s compensation;
WHEREAS, the City utilizes the services of a third-party administrator to administer worker’s compensation
claims;
WHEREAS, City staff conducted a request for proposals for third-party administrator services for the period of
July 1, 2019 through June 30, 2022;
WHEREAS, Athens Administrators was selected as the proposer best meeting the needs of the City in a cost-
effective manner.
WHEREAS, the City desires to enter a service agreement with Athens Administrators for worker’s
compensation claims administration services.
NOW THEREFORE BE IT RESOLVED,that the City Council of the City of South San Francisco hereby takes
the following actions:
1.Approves the Agreement with Athens Administrators for claims administration services for the period of
July 1, 2019 through June 30, 2022, attached hereto and incorporated herein as Exhibit 1.
2.Authorizes the City Manager to execute this agreement and to make any revisions,amendments,or
modifications,deemed necessary to carry out the intent of this resolution which do not materially alter
or increase the City's obligations thereunder, subject to approval as to form by the City Attorney.
*****
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WORKERS' COMPENSATION SERVICE AGREEMENT
This Agreement is entered into by and between City of South San Francisco ("Employer" or “City ”) and Athens
Administrators ("Administrator") this 1st day of July 2019.
RECITALS
WHEREAS, Administrator provides claims administration services to California employers subject to the
California Workers' Compensation Laws; and
WHEREAS, Employer desires to purchase Claims Administration Services from Administrator for existing open
claims reported before the effective date of this agreement (“takeover claims”) and new claims reported on or
after the effective date of this agreement (“new claims”);
NOW THEREFORE, it is agreed:
This Agreement is between the Employer and the Administrator to provide third party workers' compensation
claim administration services for Employer in the State of California, including takeover claims and new claims,
subject to the terms stated below:
I. TERM AND TERMINATION
1.01 Term:
The term of this agreement shall consist of three years from July 1, 2019 through June 30, 2022. At the
Employer’s option, this agreement may be extended for two additional one-year periods.
1.02 Termination:
a. Either party may terminate this Agreement, with or without cause and without penalty, upon ninety
(90) days prior written notice.
b. Upon termination of this Agreement for any reason, a final accounting agreeable to both parties will be
made of fees payable to Administrator and a final accounting of any funds belonging to Employer then
in the possession of Administrator, and any balance due either party will be promptly paid over to the
party entitled thereto.
c. All claim files, records, reports and other material pertaining to the employee claims subject to this
Agreement shall be the property of Employer and shall be made available promptly to Employer upon
termination of this Agreement.
d. Upon the effective date of any termination of this Agreement, all rights and obligations of the parties
under this Agreement shall cease except with respect to rights and obligations, which have accrued or
expressly survive termination.
e. In the event Employer terminates this contract but desires Administrator to handle the remaining
claims to a conclusion, a service charge will be agreed upon between the parties for Administrator's
handling of these claims. Employer agrees to provide Administrator with funds sufficient to pay all
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benefits and Allocated Loss Expenses on these remaining claims.
II. SERVICE FEES
2.01. Employer agrees to pay to Administrator Service Fees as follows:
Employer’s fixed annual fee will be paid in twelve (12) equal installments and will be due and payable
at the end of each month during the period this Agreement is in force.
2.02. Employer agrees to pay to Bill Review Service Fees as follows:
2.03. Employer agrees to pay an Annual Administration Fee of $5,000. This fee will be billed in full in the
first installment, and at the start of every program year thereafter.
2.04. Employer agrees to pay a fee of 15% of all subrogation recoveries. This fee will be paid directly from
the individual claim file as an allocated expense.
2.05. City shall pay fees for all other services as described in Administrator’s pricing proposal dated April 24,
2019 (Exhibit A).
III. ADMINISTRATOR DUTIES AND SERVICES
3.01 Administrator agrees to meet on a regular basis with Employer to:
a. Develop procedures, forms, instructions, schedules and other materials related to claim management,
including a procedure manual for Employer's use, within thirty (30) days of the effective date of this
Agreement and update such materials as needed.
b. Provide claim reporting kits including, but not limited to, claim and accident report forms, required
notices, and procedural instructions, for distribution by Employer to Employer's staff on or before the
effective date of this Agreement, and as needed thereafter.
c. Provide group education for Employer's management personnel regarding claim management as
requested.
PRICING OPTION - FLAT ANNUAL FEE FLAT ANNUAL FEE
Program Year 1 7/1/2019 6/30/2020 $196,052
Program Year 2 7/1/2020 6/30/2021 $201,933
Program Year 3 7/1/2021 6/30/2022 $207,991
TOTAL THREE YEAR COST $605,977
ONE YEAR PROGRAM EXTENSIONS FLAT ANNUAL FEE
Program Year 4 7/1/2022 6/30/2023 $214,231
Program Year 5 7/1/2023 6/30/2024 $220,658
MEDICAL BILL REVIEW
Medical Fee Schedule Reduction (OMFS)$8.50 Per Bill
(Includes: Medical, Pharmacy and Supplies)
Hospital In and Out Patient Fee Schedule Reductions $650.00 Per Bill
23.00%of Savings
Duplicate Bills
PPO Network & Specialty Bill Negotiations
No Charge
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d. Assist Employer's personnel in the development of directives, notices, and other program
communication to employees as requested.
e. Provide all forms and supplies necessary for the efficient operation of the Workers’ Compensation
insurance program, including customized benefit checks bearing Employer's name and logo, and to
prepare all legally required forms and documents including but not limited to, 1099 reports to the I.R.S.
and any and all other documents and reports now or in the future required by the state or federal
government or any other agency associated with Employer's Workers' Compensation program.
3.02. Administrator agrees to administer all claims as follows:
a. Establish and maintain a claim file, with a diary date not to exceed thirty (30) days, on each active claim
upon which indemnity benefits are being paid; A diary system not to exceed sixty (60) days on all other
open, active Indemnity claims; and a supervisory review diary not to exceed one-hundred-twenty (120)
days, or more often when needed.
b. Manage timely receipt of all pertinent claim information from Employer providers and other sources.
c. Determine, on behalf of Employer for each reported employee injury or illness, those benefits, if any
that should be paid or rendered under the California Workers' Compensation Laws. Such determination
shall include an estimate of future claim payment. Retain outside services with prior approval of
Employer, for the investigation and management of the claims. Outside services include but are not
limited to:
AOE/COE Investigators
Activities Check/Sub-rosa Investigator;
Medical Case Management and Rehabilitation Nurses/Consultants
Subrogation Investigators and Experts
d. Exhibit in each Indemnity claim file good faith efforts to contact all injured workers by telephone within
at least twenty-four hours of receipt of claim, and in no event any later than forty-eight hours of receipt
of claim, excluding weekends and holidays. Establish phone contact with appropriate Employer
department for initial discussion of claims, as needed, within three (3) working days of receipt of claim.
e. Initiate investigations, subject to approval by Employer, to determine compensability of reported and
actual claim status. Employer shall have prior approval of the selection of any investigator used to
investigate Employer's claims of industrial injury or illness. Take necessary statements and investigate
facts of the case within thirty (30) days receipt of claim, when warranted.
f. Prepare documentation of cases for litigation and continue to monitor legal counsel representing
Employer in legal action(s) and assist counsel as necessary in preparation of litigation. Employer shall
select and approve counsel prior to each referral. In addition, Administrator shall promptly provide
Employer with copies of all correspondence generated on those claim files which are litigated and shall
immediately notify Employer in writing and shall keep Employer closely informed on those claims
involving allegations of Serious and Willful Misconduct or alleged violation(s) of California Labor Code
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Section 132(a). At time of case referral to defense counsel administrator shall prepare a letter of
direction to defense counsel outlining work to be done, by whom, and in what time frame. All
assignments, instructions and communication with defense counsel must be documented in the claim
file and computer note pads. Administrator shall manage defense counsel on an ongoing basis and
obtain status reports from defense counsel every sixty (60) days. Administrator shall actively manage
litigated files and not perform functions and shall not require defense counsel to perform activities
which can be accomplished effectively by claims staff. Examples of required examiner activity on
litigated files include by are not limited to:
Scheduling medical appointments
Writing cover letters to doctors
Subpoenaing medical records
Answering applications
Filing and serving requisite documents
Administrator shall obtain defense counsels’ written evaluation within sixty (60) days of submission,
including evaluation of liability, verdict potential, settlement value, and case strategy.
g. Disburse payment on behalf of Employer out of the bank trust account funded by Employer, all
"Allocated Loss Expenses", which is defined to include all costs incurred on behalf of Employer
specifically related to an individual claim, including but not limited to, attorneys, independent adjusters
or investigators, expert witnesses, copying records or transcripts, court costs or Appeals Board fees or
other costs deemed proper and necessary to represent Employer.
h. Examine on behalf of Employer all reports of industrial injury or illness relating to Employer's
employees or former employees and reported to Administrator and to conduct investigations on such
cases by Administrator's salaried employees as in Administrator's judgment is deemed necessary.
i. Pay compensation, medical expense, "Allocated Loss Expense", and all other benefits as prescribed by
law out of funds provided by Employer. Payments made by Administrator without Employer approval,
where approval is required elsewhere in this Agreement, shall be the responsibility of the
Administrator.
j. Maintain a claim file on each reported claim which shall be available to Employer at all times for
inspection and to conduct, on a quarterly basis, claim file reviews with Employer at the City’s Offices.
k. Index Bureau System. On the Employer ’s behalf, Athens shall subscribe and report to the Index Bureau
System related to each claim. The costs of such reports will be allocated to each individual claim file.
l. Create, reserve and enter required claim data into Administrator's computer system within five (5)
working days of receipt of notice of claim from Employer. Enter all payments, reserved revisions, and
file closings into the information system within three (3) working days.
m. Review Employer's medical bills and other medical charges and treatment relating to Employer's claims
of industrial injury or illness, for causal relationship to all claims of injuries/illness, and reasonableness
of treatment prior to payment. Solicit all medical bills, medical reports and records, and
documentation of alleged wage loss prior to settlement negotiations.
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n. Make all disability payments and send all notices in a timely manner, abiding by all applicable
provisions of the California Labor Code and California Workers' Compensation Laws, Rules and
Regulations.
o. Make payments of bills within thirty (30) days of receipt, and assure timely review and payment of all
medical bills in accordance with statutory deadlines and requirements.
1. Acknowledge to Employer all claims reported to Administrator within three (3) working days of
receipt of the notice of claim and to notify Employer and injured workers within five (5) working
days of the notice of claim to Employer, whether the claim has been accepted, delayed for further
investigation, or denied. Administrator shall consult with Employer prior to accepting, delaying
and/or denying a claim.
p. Convert all Medical Only Claims to Indemnity Claims status when the paid amount reaches two-
thousand-five-hundred ($2,500) dollars or when the claim remains open in excess of one (1) year.
q. Recognize and where appropriate investigate all subrogation and/or contribution possibilities,
preserving evidence and utilizing appropriate investigators and experts, as needed, after first obtaining
Employers permission to engage such investigators/experts. As respects subrogation and contribution
cases, any compromise settlements or lien reductions will be discussed with the Employer.
r. Administrator may receive compensation in connection with outsourced services, either by retaining a
portion of expenses charged to the Account, or by receiving fees from preferred providers. The
amount that Administrator receives will vary depending upon the preferred provider, and may be
calculated based on percentage of savings, percentage of revenue to the provider or Administrators
mark-up of provider fees. The amounts retained or received by Administrator in connection with
outsourced services are in addition to the basic fees, reimbursable expenses, additional service fees,
and the taxes paid to Athens by Company.
s. MSA Allocations/SCHIP Reporting – Athens has contracted with third party Gould & Lamb, LLP for
Medicare Set Aside allocations and State Children Health Insurance Program (“SCHIP”) reporting
efforts. Athens may exclusively utilize the services of Gould and Lamb, LLP for MSA allocations and
SCHIP reporting requirements unless otherwise requested in writing by Employer.
t. Inflation Protection Clause – In the event that the annual average All Items Consumer Price Index for
All Urban Consumers (CPI-U) as published by the Bureau of Labor and Statistics is subject to an
inflation rate of greater than 10% above the rate which is published as of the effective date of this
agreement the Administrator has the ability to make reasonable adjustments to the fees which are
detailed in Section II of this agreement so as to equitably share the effect of inflation between
Administrator and Employer. Notice of fee adjustments will be in writing and must be delivered at
least (30) days in advance of adjustment.
3.03 Administrator agrees to monitor relevancy of medical treatment by the following:
a. Maintain continual contact with medical practitioners in order to monitor claimant treatment process
and a timely return to work. Administrator shall make a good faith effort to establish contact with
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attending physician within twenty-four (24) hours of receipt of injury report and shall make contact
with attending physician's office within forty-eight (48) hours of receipt of injury report and shall
document such contact in the claim file. In cases involving loss of time from work in excess of (10) ten
calendar days, Administrator shall make contact with the attending physician’s office on a biweekly
basis during the continuation of temporary disability to assure disability payments are supported by
medical opinion.
b. Review and discuss Vocational Rehabilitation Program(s) with Employer prior to its initiation for an
individual claimant.
c. Monitor individual vocational rehabilitation programs to determine appropriateness and progress.
3.04. Administrator agrees to the following record keeping and reporting requirements:
a. Provide Employer with monthly reports consisting of:
(1) Check Registers including all claim disbursements made on behalf of Employer.
(2) Computerized loss reports in an acceptable format as mutually agreed upon at the
effective date of this Agreement, showing descriptive data, details of each month's
payments, total payments, reserves and total experience and incurred loss values for
each claim.
(3) Any and all other reports as required by Employer.
b. Provide oral claims reports on demand, special specific-focus loss run reports within twenty-four (24)
hours and larger or major computer analysis reports within seven (7) working days, excluding
weekends and holidays. It is further agreed and understood that should Employer require that
Administrator prepare for Employer special reports, which require additional programming costs there
may be an additional charge for said reports.
c. Maintain all records and statistical data on each employee claim of injury or illness, including, but not
limited to, a record of each denial, delay, litigated claim and loss, which records and data shall be
available upon request by Employer. Employer, at Employer's discretion, may audit all records
maintained by Administrator including, but not limited to, all payments made on behalf of Employer.
Such audit may incorporate random sampling or other audit procedures suitable to Employer.
d. Prepare and submit Federal Information Return (Form 1099) by statutory deadline for applicable
payments made by Administrator on Employer's behalf, during the term of this Agreement and as
specified under Section 1.02. (e) of this Agreement.
e. Prepare all other reports as necessary to remain in compliance with all Workers' Compensation Laws
and other state and federal laws, rules and regulations.
f. Provide report to Employer of all payments when made and any other information necessary for
Employer to adequately fund the bank trust account. All such payments shall be supported with check
payment detail and monthly summary report showing all payees, payment amounts and dates of
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payment.
g. Provide for Employer the ability to be on-line with Administrator's computer system. This system will
provide Employer with all financial and statistical data relating to Employer's workers' compensation
claims, together with narrative topical "notepad" reports, on each individual claim. This system will
also include electronic mail service between Administrator and Employer; the ability to electronically
transmit 5020’s (Employer ’s First Report of Industrial Injury/Illness); OSHA Log generation; and
complete report generation capabilities.
h. Special reports, new reports and data feeds can also be requested. They are subject to a cost per
quote at a rate per project or per hour once the scope has been agreed upon.
IV. EMPLOYER'S DUTIES
4.01. Employer agrees to perform as follows:
a. Promptly report to Administrator as they shall occur and become known to Employer, the employee
claims of occupational injury, disease, illness, or death.
b. Promptly forward to Administrator all applications, notices of claims, notices of hearings or other legal
notices pertaining to claims against Employer for occupational injury, disease, illness, or death, and all
other correspondence or information received by Employer which is or could be relevant to the
efficient and proper handling of any reported claim of industrial injury, disease, illness, or death.
c. Provide Administrator with all necessary data required for Administrator to perform under this
Agreement and cooperate fully with Administrator in the performance of this Agreement.
d. Make available to Administrator funds for the payment of benefits or services to or for occupational
injury, disease, illness, death, or vocational rehabilitation and medical treatment of employees of
Employer, or their dependents in the event of death, and "Allocated Loss Expense". Administrator shall
administer said funds in accordance with the terms of this Agreement as Trustee of Employer.
e. Pay promptly to Administrator the service fees as prescribed and included in this Agreement. The
Service Fees are not included in and do not include "Allocated Loss Expenses"
V. ELECTRONIC CLAIM FILES, STORAGE, AND TRANSFER OF FILES
5.01 Files
Administrator shall record and maintain an electronic file of all industrial injuries reported. Files may be
maintained electronically, in hard copy, or in other media, at Administrator’s discretion. Such files shall be
made available to Employer or its designated representative for inspection upon request.
5.02 Transfer of Electronic Files
Upon termination of this Agreement pursuant to section 1.02 above, Administrator will arrange for the
transfer of Employer ’s files to Employer, or an entity designated by Employer, within 30 business days of
the agreed upon transfer date of the files to the new Administrator. Employer will reimburse
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Administrator all reasonable costs incurred in such transfer of the files to the Employer. The electronic
files will be in the electronic form used by Administrator to provide the services to Employer under this
Agreement. Employer may request that the files be provided in a different format or that the hard copies
of the files be provided to it, provided that Employer pays Administrator for all costs associated with such
request. Notwithstanding the foregoing, Administrator will not be obligated to transfer the files to
Employer or an entity designated by Employer, unless Employer has paid Administrator for all amounts
due for services rendered pursuant to Section 3 of this Agreement. Employer agrees to comply, and to
require any recipient of the files designated by it to comply, with all applicable laws and regulations
relating to the storage, transmission, use and confidentiality of the files and to hold Administrator
harmless in relation thereto.
5.03 Copies of Files
Administrator may, at its discretion keep a copy of Employer ’s files if it deems it necessary to comply with
or defend itself in relation to any obligation or rights that it has under this Agreement, applicable laws or
regulations. Notwithstanding the foregoing, Employer may at any time request that any copies of
Employer’s files retained by Administrator be deleted destroyed and Administrator shall provide notice to
Employer that such request has been complied with.
VI. FINES, PENALTIES AND STANDARDS
6.01. All services as described in this Agreement shall be performed in accordance with all applicable laws,
rules and regulations of any and all governmental authorities and applicable standards, and specifically
performed in accordance with all applicable Workers' Compensation Laws of the State of California.
6.02. Administrator and Employer acknowledge the obligations and penalties contained in the California
Workers' Compensation Reform Act of 1989 that may be imposed on both Employers and claim
administrators and agree to the following:
a. Penalties for errors or omissions caused by Employer's failure to act or timely report claims or issues to
Administrator that create a delay in payment of benefits, incorrect payment of benefits, or
administrative fine(s) or penalty(s) shall be the responsibility of Employer. Penalties for errors or
omissions caused by Administrator’s performance of services under this contract that create a delay in
payment of benefits, incorrect payment of benefits, or administrative fine(s) or penalty(s) shall be the
responsibility of Administrator.
b. Administrator shall provide Employer with a quarterly accounting of penalties paid by Administrator on
behalf of Employer including a description and detailed listing of each penalty payment and the specific
claim file to which the penalty payment was charged. Penalties, which are computed by Administrator,
shall be paid out of Employer's benefit account and Administrator shall then reimburse Employer
quarterly for those penalties, which are the responsibility of Administrator under the terms and
conditions of this Agreement, with pro-rated interest at the prevailing prime interest rate.
c. Without limiting the provisions set forth in the above two paragraphs it is agreed that upon receipt by
Administrator of a notice of claim from Employer, upon which indemnity benefits shall be paid or
notice given promptly to the employee in order to avoid late payment or notice of benefit penalties,
Administrator shall have ten working days (excluding weekends and holidays) from the date of receipt
of the claim from Employer, to investigate and pay the temporary disability or send the required wage
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continuation notice, and that failure on the part of Administrator to do so within this time frame shall
be the financial responsibility of Administrator for any fine imposed for late notice or payment of
benefits. Any fines or penalties for late payment or notice of benefits on claims, which are received
from Employer by Administrator on or, after the ninth day following the date Employer knew or should
have known about the claim(s) shall be the responsibility of Employer.
d. Administrator will be responsible for any fines or penalties associated with questionable or
controverted claims which Administrator denies without first consulting and obtaining approval by
Employer for denial of the claim(s) Administrator will not be responsible for any fines or penalties
levied by the Division of Workers' Compensation or any other judicial or quasi-judicial organization for
improper denial of a claim(s) if, over the written objections of Administrator, Administrator has denied
said claim(s) at the express written direction of Employer.
e. Any controversy between the parties to this Agreement involving the construction or application of the
terms, provisions, or conditions of this Agreement relating to the payment of penalties or fines shall be
submitted to arbitration upon the written request of one party, after service of that request upon the
other party.
f. Arbitration and controversies relating to the payment of penalties or fines under this Agreement shall
comply with and be governed by the provisions of the California Arbitration Act, as set forth at sections
1280 et. seq. of the California Code of Civil Procedure.
g. Failing informal efforts between the parties to this Agreement to resolve disputes regarding the
payment of penalties or fines, each party shall appoint one person to hear and resolve the dispute.
These arbitrators, one appointed by each party, shall be known for the purposes of this Agreement as
"initial arbitrators". If the "initial arbitrators" are unable to agree on a resolution of the dispute they
shall then choose a third independent and impartial arbitrator whose decision shall be final and
conclusive on both parties.
h. If a dispute or arbitration under this Agreement is pending at a time when payment of the disputed
penalty(s) or fine(s) is either statutorily mandated or when failure to effect payment will result in an
increase in the fine or penalty, or an additional fine or penalty, each party shall bear liability for one-
half of the penalty(s) or fine(s) in dispute until such time as the arbitration is concluded and liability for
payment of the fine or penalty is finally determined. Once determined, the party adjudged to be liable
for the penalty(s) or fine(s) shall reimburse the non-liable party for any portion of the penalty(s) or
fine(s) the non-liable party may have paid during the pendency of the arbitration.
6.03 Excess Coverage or Other Insurance: Administrator, as a part of the regular claims administration
process, shall comply with the reporting provisions, guidelines, and requirements imposed by the
Employer ’s Excess Workers' Compensation Insurance Carrier(s) and other carriers that may be involved
in the administration of the Employer ’s Workers' Compensation Program. However, Employer as
policyholder shall continue to be liable for all the duties, requirements, obligations, and penalties
imposed by Employer's Carrier(s).
VII. MATERIAL CHANGE
7.01. In the event of material change to Employer's operations, Section II, "Service Fees", to this Agreement
shall be subject to renegotiation. "Material Change" shall be defined as the acquisition, merger, or
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divestiture by Employer of or with another company or business entity, the creation of new business
operations not directly related to Employer's current California operations, or the elimination of
business operations within the State of California, which could result in a materially significant increase
or decrease in employee population and workers' compensation claims filed in the State of California.
VIII. DEFINITION OF "MEDICAL ONLY" AND "INDEMNITY" CLAIM
8.01. The definition of an "Indemnity Claim" shall be:
a. Any alleged work-related claim for which any of the following is claimed:
(1) Temporary Disability
(2) Permanent Disability
(3) Vocational Rehabilitation
(4) Life Pension
(5) Death
8.02. The definition of a "Medical Only" claim shall be:
Any alleged work-related injury or illness for which medical treatment is sought, the claimant is not
hospitalized, temporary disability does not exceed the waiting period as defined by the Workers' Compensation
Laws of California, and no other Indemnity benefits are claimed.
IX. INSURANCE
9.01. Prior to beginning the Work and continuing throughout the term of this Agreement, Administrator,
at its sole cost and expense, furnish the City with certificates of insurance evidencing that
Consultant has obtained and maintains insurance in the following amounts:
a. Workers’ Compensation that satisfies the minimum statutory limits.
b. Commercial General Liability and Property Damage Insurance in an amount not less than ONE
MILLION DOLLARS ($1,000,000) combined single limit per occurrence, TWO MILLION DOLLARS
($2,000,000) annual aggregate, for bodily injury, property damage, products, completed operations
and contractual liability coverage. The policy shall also include coverage for liability arising out of the use
and operation of any City-owned or City-furnished equipment used or operated by the Administrator, its
personnel, agents or subcontractors.
c. Comprehensive automobile insurance in an amount not less than ONE MILLION DOLLARS
($1,000,000) per occurrence for bodily injury and property damage including coverage for owned and non-
owned vehicles.
e. Professional Liability Insurance in an amount not less than ONE MILLION DOLLARS ($1,000,000)
covering the licensed professionals’ errors and omissions.
X. GENERAL PROVISIONS
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10.01 Administrator shall comply with all applicable local, state and federal laws, regulations and ordinances
in the performance of this Agreement. Administrator shall not discriminate in the provision of service
or in the employment of persons engaged in the performance of this Agreement on account of race,
color, national origin, ancestry, religion, gender, marital status, sexual orientation, gender identity or
gender expression, age, physical or mental disability in violation of any applicable local, state or
federal laws or regulations.
10.02. Neither party shall assign this Agreement or any part hereof without the written consent of the other
party.
10.03. Each party agrees to indemnify, defend, and hold harmless the other against all actions, claims or
demands, and against all costs, expenses and attorneys' fees, arising directly or indirectly out of an
actual or alleged injury to a person or to property as an actual or alleged result of an act or omission of
the party or any of its shareholders, directors, officers, employees, or agents and each party's
obligation to so indemnify, defend and hold harmless the other shall survive the expiration or earlier
termination of this Agreement.
10.04. All notices or other communications under this Agreement shall be sent to the parties at the addresses
set forth below:
Employer: Administrator
City of South San Francisco Athens Administrators, Inc.
400 Grand Avenue P.O. Box 696
South San Francisco, CA 94080 Concord, CA 94522
Attn: Leah Lockhart, Human Resources Director Attn: James R. Jenkins, President
10.05. In the event either party hereto shall institute formal legal action, the prevailing party shall be entitled
to its reasonable attorneys' fees.
10.06 This Agreement may be amended at any time by mutual agreement of the parties, but any such
amendment must be in writing, dated, signed by the parties and attached hereto.
10.07. Any failure of a party to insist upon strict compliance with any term, undertaking or condition of this
Agreement shall not be deemed to be a waiver of such term, undertaking, or condition. To be effective,
a waiver must be in writing, and signed by the parties hereto.
10.08. This Agreement shall be governed by California law and any action arising out of it shall be instituted
and prosecuted only in the municipal or superior court of San Mateo County, State of California.
10.09 This Agreement instrument constitutes the entire agreement between the parties. Any oral
representations or modifications concerning this Agreement shall be of no force and effect.
IN WITNESS WHEREOF: The Parties have hereto caused this Agreement to be executed by their duly authorized
representatives as of the day and year stated.
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CITY OF SOUTH SAN FRANCISCO ATHENS ADMINISTRATORS
Signature Signature
Title Title
Dated Dated
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EXHIBIT A
Pricing Proposal
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