FY18-19 and 19-20 RECOMMENDED OPERATING AND CIP BUDGET - FIN

Workers’ Compensation

770.8220

Division Description The Human Resources Division (HR) oversees the City's Workers Compensation Program and partners with a Third-Party Administrator (TPA), who handles the day-to-day workers’ compensation claim administration. Human Resources coordinates all aspects of the workers' compensation program with the TPA. This includes reporting of injuries; providing lost time and salary information; training for managers, supervisors, and other employees; early return to work programs; claimant service evaluations; and maintenance of the City's medical, exposures, and workers' compensation claims files. The City of Morgan Hill is currently a member of the Local Agency Workers’ Compensation Excess joint powers authority (LAWCX) for the purpose of obtaining and pooling excess workers' compensation coverage. Under this arrangement, the City maintains a self-insured retention of $250,000 of each claim and excess coverage with statutory limits, up to $5,000,000. Beginning FY 14-15, the City began allocating each department the same fixed percentage (2.48%) of salary for each of its employees, to cover the cost of the excess (> $250,000) workers' compensation insurance, administrative costs to the City’s third-party administrator, and out-of- pocket medical costs below the self-insured retention level ($250,000). At the same time, the City determined that workers’ compensation benefits (replacement of salary/ wages) for each affected employee should be paid by their home department’s operating budget. This methodology mirrors the actual costs as if the employee were still earning salary/wages for time worked. This methodology change was implemented to avoid the impression that there were significant salary savings in operating departments, which were actually incurring significant absences from work due to job-related injuries or illness. FY 2016-17 and 2017-18 Accomplishments • Offered ergonomic evaluations to new employees and to employees who changed workstations • Partnered with the TPA to conduct a training for supervisors and managers on workers' compensation procedures • Met quarterly with the TPA to review open claims, status to date, and action plan • Reduced lost time days on new claims from 73 days on 2 claims to 4 days on 1 claim • Created a new City Workers Compensation email address to streamline the claim reporting process • As of February 28, 2018, open inventory of claims dropped from 18 to 11

308 INTERNAL SERVICE FUNDS/MISCELLANEOUS PROGRAMS