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HomeMy WebLinkAboutRES 83-338 R E S O L U T I O N BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF BEAUMONT: THAT the City Manager be, and he is hereby, authorized to enter into an interlocal agreement with the Texas Municipal League Workers ' Compensation Joint Self Insurance Fund, in substantially the form attached hereto as Exhibit "A" , for the provision of workers ' compensation coverage for City employees for a three-year period beginning October 1, 1983; and, BE IT FURTHER RESOLVED that the workers ' compensation insurance coverage provided under the agreement shall extend to members of the City Council of the City of Beaumont. PASSED BY THE CITY COUNCIL of the City of Beaumont this day of 1983. - Mayor - r TEXAS MUNICIPAL LEAGUE WORKERS' °COMPENSATION JOINT INSURANCE FUND . 1020 Southwest Tower, Austin, Texas 78701 INTERLOCAL,AGREEMENT This Contract and Interlocal Agreement entered into by and between the Texas Municipal League Workers' Compensation Joint Insurance Fund (hereinafter referred to as "Fund") and the undersigned political subdivision of the State of Texas (hereinafter referred to as "Employer Member") for the purpose of pro- viding the statutory benafits prescribed by Article 8309h of the Texas Workers' Compensation Act for employees of political subdivisions. WITNESSETH: The undersigned Employer Member in consideration of the adoption of a plan of self-insurance as authorized in Article 8309h, Vernon's Annotated Texas Statutes, to provide Workers' Compensation benefits at a minimum cost and in further consideration of other political subdivisions executing identical Interlocal Agreements does hereby agree to become a self-insured workers' com- pensation employer by becoming one of the members of the Fund Pool of self- insured Employer Members. The conditions of membership agreed upon by and between the parties are as follows: - 1. Definition of terms used in this Interlocal Agreement. a. "Board" - refers to the Board of Trustees of the Texas Municipal League Workers' Compensation Joint Insurance Fund. b. "Premium" and "Contribution" =- are -used interchangeably in some parts of this Interlocal Agreement. "Premium" is used to identify the rating formulas established by the State Board of Insurance, which are used as guidelines to establish Employer Members' cash contribu- tions to the Fund. Any reference at any time in this Interlocal Agreement to an insurance term not ordinarily a part of self- __ insurance shall be deemed for convenience only and is not to be construed as being contrary to the self-insurance concept except where the context clearly indicates no other possible interpretation such as, but not limited to, the reference to_ "reinsurance". e. "Servicing Contractor" - Johnson and Higgins of Texas, Inc. d. "Manual Rates" - the basic workers' compensation rates applicable to -- each classification of employees promulgated by the State Board of Insurance. e. "Experience Modifier" - refers to the factor applied to the manual �• � Ci��_� � fi EXHIBIT "A" r rates that reflects the political subdivis_,.�n's loss experience, which is based on the State Board of Insurance promulgated experience rating plan. f. "Standard Consideration" or "Standard Premium" - the amount that is determined by applying the experience modifier of the Employer Member to the manual rates. 2. The term of. this Interlocal Agreement shall be for a term commencing 12:01 a.m. October 1, 1983, and terminating 12:01 a.m: October i, 1986, unless the same is sooner terminated-,--by sixty (60) days written notice of intent to terminate by either party-unless otherwise specified under the terms and agreements of this Interlocal Agreement or by the Bylaws of the Fund. The Fund will have the right to terminate this agreement only for non-compliance with paragraphs 3, 4 and 7. 3. Annually, each Employer Member shall submit to the Fund, on a Premium Worksheet form supplied by the Fund, its estimated payroll for each classification of employee. The rates established by the State Board of Insurance shall be applied to arrive at a manual premium. If the Employer Member has established, through experience, a modifier, then the experience modification of that Employer Member shall be used to arrive at the standard premium to be paid by the Employer Member. In the absence of an earned experience modification for the Employer Member, the manual rate as established by the State Board of Insurance in effect, at the beginning of each Fund Year, will be used as a guide to produce a manual, as well as -a standard, contribution. The Employer Member agrees to pay the Fund, on or before the inception date of this Interlocal Agreement an initial deposit of 252 of the annual catastrophic excess of loss and aggregate stop-loss reinsurance premium, plus 1/12 of the estimated annual administrative expense charge, management -information system (MIS) expense charge (if applicable) , risk control expense charge, and claims handling expense charge as set forth in Exhibit A attached hereto. On or before the first month after the inception date of this Interlocal Agreement, the Employer Member agrees to pay the Fund 1/10 of the balance of the annual catastrophic excess of loss and aggregate stop-loss reinsurance premium, plus 1112 of the esti- mated annual administrative expense charge, MIS expense charge (if applicable), .risk control expense charge, and claims handling expense charge. On or before the beginning of the third month after the incep- tion date of this Interlocal Agreement, the Employer Member agrees to make an identical payment as determined above. On or before the beginning of the fourth month of this Interlocal Agreement, a similar payment based upon the actual usage of the MIS (if applicable) , claims handling and risk control services of the first .month shall be paid to the Fund with subsequent monthly payments to be paid each and every month thereafter. It is further understood that the other charges (ten (10) monthly installments of catastrophic. excess of loss and aggregate stop- loss reinsurance premium, and twelve (12) monthly installments of the i estimated annum administrative expense charge, that are based on stan- dard considerations will be adjustable at the end of each Fund year, based on actual payrolls, manual rates and experience modifiers. At the end of each Fund Year there will be submitted by the Employer Member- actual payrolls as reflected on the books of the Employer Member. The Fund reserves the right. to audit the payroll records of the Employer Member. 4. The Fund has contracted with the Servicing Contractor to supply loss control services through its subcontractor, Hartford Specialty Company (hereinafter referred to as "Hartford_") , to the Employer Member to assist them in following a plan of loss control that may result in reduced losses. The Servicing Contractor through Hartford, shall provide all of the services as provided in the Service Contract enured into by and bet- ween the Servicing Contractor and the Fund on behalf of the Employer Member. The Employer Member agrees that it will cooperate in instituting any and all reasonable safety regulations that may be recommended for the purpose of eliminating or minimizing hazards that would contribute to workers' compensation losses. In the event that the recommendations sub- mitted by the Servicing Contractor or Hartford on behalf of the Fund seem unreasonable, the Employer Member has a right to appeal to the Board of Trustees. The Board shall hear the objections of the Employer Member at its next regularly scheduled meeting and its decisions will be final and binding on all parties. 5. The Employer Member. agrees that it will appoint a Workers' Compensation Coordinator of department head rank, and that the Fund and its Servicing Contractor or Sub-contractor's shall not be required to contact any other individual except this one person. Any notice to or any agreement with the Workers' Compensation Coordinator shall be binding upon the Employer Member. The Employer Member reserves the right to change the Coordinator from time to time by giving written notice to the Fund and to the Servicing Contractor. 6. The Fund, through the Servicing Contractor and its Sub-contractor General Adjustment Bureau, (hereinafter referred to as "GAB") , agrees to handle any and all claims after notice of injury has been given, to prepare all - required Industrial Accident Board forms, and provide a defense. The Employer Member hereby appoints Servicing Contractor and its Sub- contractor, GAB, as its agents to act in all matters pertaining to pro- cessing and handling of workers' compensation claims and shall cooperate fully in supplying any information needed or helpful in such defense. They shall carry on all negotiations with the injured employee and his attorney at the prehearing conference and negotiate within authority pre- viously granted by the Fund. If a personal appearance by the employer or a co-employee is necessary, the expense of this appearance will be paid by the Employer Member. With the advice and consent of the Fund, the servicing Contractor, through its Sub-contractor, GAB, will retain and d supervise legal counsel on behalf of 'and at the expense of the Fund necessary for the prosecution of any litigation. All decisions on .indi- vidual cases shall be made by the Fund through the Servicing Contractor and GAB, which includes the decision to appeal or not to appeal an Industrial Accident Board's final ruling and decision. However, any Employer Member shall have the right in any case involving one of its ,. employees, to consult with the Fund on any decision made by the Servicing Contractor or GAB. Any suit brought or- defended -by the-Servicing.—. Contractor and the Fund shall be =in the namd of the-political -sub- _ - --- --- division. Notwithstanding any provisions of- this paragraph, all reports and filings required by the Workers'-.ompensation Law and the Industrial Accident Board of an employer will be -the responsibility of the Employer Member. It is further understood that this agreement does not cover discrimination suits under Article 8307c. There shall be supplied periodically to each Employer Member. a computer printout involving a sta- tement of claims, claims status, and activity report cumulative for each Fund year. 7. The Employer Member acknowledges that it has received a copy of the Bylaws of the Fund and agrees to abide by the Bylaws and any amendments thereto. 8. The Fund agrees that all Fund transactions will be annually audited by a nationally recognized, certified public accounting firm. 9. The Fund, through the Servicing Contractor, will file all necessary tax forms wiih the Internal Revenue Service. 10. The Fund shall at all times provide for catastrophic excess of loss and aggregate stop-loss reinsurance as set out in Exhibit A. 11. The Fund further agrees to provide a complete range of program management and management information system (MIS) services to include, by way of example, but not of limitation, the following: a. Claims print-outs rendered monthly and keyed by designated Employer Member functions or departments. b. Breakdown of payments made by compensation and medical. c. Monthly billing statements for reimbursement of current payments. plus Contractor fees. d. Maintenance of loss and payroll statistics for determination of the City's experience modifier under the experience rating plan. 12. The Employer Member executing this Agreement shall designate in the following space the seating capacity of any aircraft presently owned or leased by the Employer Member. Further, the Employer Member agrees to notify the Fu._. within fifteen' (1S) days if auy new aircraft are purchased or leased during the term- of this Agreement, and the seating- capacity of said newly acquired aircraft. 13. The Employer Member further agrees to hold the Fund harmless from any and all claims (including attorney fees) that may be asserted against the Fund for the non-payments of any claims due -to-the failure_ of-_the - Employer Member to maintain adequate reserves-for the payment of -claims. IN WITNESS WHEREOF, the parties have hereunto set their hands by their represen- tatives thereunto duly authorized this day of Contract Number . TEXAS MUNICIPAL LEAGUE WORKERS' COMPENSATION • JOINT INSURANCE FUND BY Director Austin, Texas The Workers' Compensation Coordinator for the Employer Member is: NAME: FOR ADDRESS: Employer Member CITY: ZIP By TELEPHONE: Authorized Official Texas Exhibit A TML WORKERS' COMPENSATION'JOINT INSURANCE FUND ADDENDUM TO INTERLOCAL AGREEMENT CITY OF BEAUMONT 1. The Fund shall at all times provide for unlimited catastrophic reinsurance of the Employer Member excess of $150,000 for any one accident or occurrence. 2. The Fund shall at all times provide-for unlimited aggregate stop- loss reinsurance to assure that the incurred losses shall not exceed the maximum of 75% of combined cash-flow cities' standard contributions per Fund Year. 3. It is mutually agreed that the fees payable for services and rein- surance under this Interlocal Agreement shall be based on the following schedule: Administrative Services 2.0% of standard contributions (Estimated cost is $16,430) • Catastrophic and Aggre- 2.0% of standard contributions gate Reinsurance (Estimated cost is $16,430) Claims Administration $24 per medical-only claim $180 per indemnity claim $6.50 per claims for management information system support (Estimated cost is $22,991) Risk Control $43 per hour of safety professional consultation $53 per hour for industrial hygiene (Estimated cost is $10,750) Payroll Auditing $34 per hour (Estimated cost is $408) Note: Total estimated program cost of $67,009 is based on the following assumptions: 1. Standard premium of $821,504 2. 292 medical-only claims 3. 75 indemnity claims 4. HIS support for 382 claims 5. 250 hours .of safety professional consultation 6. 12 hours of payroll auditing