3.3. SR 09-15-2003 - Laserfiche WebLink

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TO: FROM: DATE: SUBJECT: MEMORANDUM Mayor and City Council Lori Johnson, Finance Director September 15, 2003 Consider Worker's Compensation Insurance Renewal Item ~ 3.3. The city's worker's compensation insurance policy with the League of Minnesota Cities Insurance Trust (LMCIT) expires on September 30, 2003. Attached is a renewal quote for the policy period from October 1, 2003 through September 30, 2004. The annual premium before credits for managed care and a deductible is $127,853. This includes the premium for the water and electric departments which are also covered under this policy. The renewal quote is based on an experience modification factor of .78. The experience modification last year was .79 and the year prior .81. This is a very good experience modification factor. Obviously the efforts of the Safety Committee and employees in promoting and practicing employee safety are paying off. Staff recommends that the city continue to elect the managed care option which will result in a premium savings of $4,256. The managed care credit has decreased over time as the LMCIT has evaluated the effectiveness of and cost savings associated with this program. However, as long as a discount is offered, the city will participate in this program as it other benefits including referral assistance and guidance to injured workers so they get proper care and are able to return to work as soon as possible. Additionally, in 2001, the deductible on this policy was increased from $5,000 to $10,000. The renewal premium savings for a $10,000 deductible is $26,244. This deductible apphes to medical expenses only. Mary Eberley, First National Insurance, and I have reviewed claims history for the last several years to determine if the deductible should be changed. It appears that the claims pattern has not changed; most of the claims are small, less than $1,000, with only one claim at most per year exceeding $5,000. The premium savings in the last several years have far exceeded the deductibles incurred. If the Council chooses to adjust the deductible, this item may be taken off the consent agenda to allow further discussion. Action Requested The City Council is asked to approve the worker's compensation insurance renewal quote with the LMCIT effective October 1, 2003 through September 30, 2004 with managed care and a $10,000 deductible resulting in a premium of $97,353.