4.1. SR 09-28-1998 - Laserfiche WebLink

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ity of River TO: FROM: Item #4.1. MEMORANDUM Mayor & City Council Lori Johnson, Asst. City Administrator/ Finance Director DATE: September 28, 1998 SUBJECT: Workers' Compensation Insurance Renewal At last Monday's Council meeting, the city's workers' compensation insurance renewal with the League of Minnesota Cities was discussed briefly. The Council requested additional information to determine whether it may be beneficial to increase the deductible from $5,000 to $10,000. Increasing the deductible from $5,000 to $10,000 increases the city's exposure per occurrence by $5,000 and offers an annual premium savings of $3,477. Attached are claims reports for October 1995 through August 1998. The majority of the claims are less than $1,000 with a few claims in the $1,000 to $2,000 range. In the past three years we have not experienced any claim in excess of our $5,000 deductible. When reviewing the report, please note that some of the amounts are held in reserve and may not be or were not spent. For instance, in the 1996/1997 claim report, one claim shows a total cost of $13,085. The total amount actually paid out on that claim was $1,330.34. Based on the three year historical information, it appears as though the city would not have occurred any additional cost by increasing the deductible from $5,000 to $10,000. However, as you are well aware, one claim in excess of $8,500 would result in additional cost to the city. The last major claim in excess of $10,000 occurred in January, 1995. Action Requested The City Council is asked to approve the insurance renewal with the League of Minnesota Cities with the managed care option and either a $5,000 or $10,000 deductible as determined by the City Council. 13065 Orono Parkway · P.O. Box 490 · Elk River, MN 55330 · TDD & Phone: (612) 441-7420 · Fax: (612) 441-7425