12-003 York Risk Services,Workers' Compensation Self-Insurance Claims AdministrationWorkers' Compensation Self-
Insurance Service Agreement
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WORKERS' COMPENSATION
SELF-INSURANCE CLAIMS
ADMINISTRATION AGREEMENT
This Agreement is entered into by and between the City of Cupertino, a municipal
corporation, hereinafter referred to as "CLIENT," and YORK RISK SERVICES GROUP,
INC., a New York Corporation, hereinafter referred to as "YORK."
RECITALS
1. WHEREAS, CLIENT desires to retain YORK pursuant to the terms and provisions
of the Agreement to provide claims administration services on claims arising
out of CLIENT's self-insured program which have been assigned by CLIENT to
York and that it is legally authorized to retain YORK on the terms and
conditions set forth herein;
2. WHEREAS, CLIENT and YORK have agreed to enter into a Service Agreement for
claims administration services on the terms and conditions set forth herein;
3. NOW THEREFORE, for and in consideration of the promises set forth
hereinabove, and other good and valuable considerations, the receipt and
sufficiency of which is hereby acknowledged, YORK and CLIENT agree as
follows.
TERMS AND CONDITIONS
1. Term of Agreement
This agreement is effective July 1, 2011 and shall be continuous through June
30, 2014. The Agreement shall be automatically extended for additional one-
year terms as of each anniversary of its commencement unless prior to that
time it has . been terminated in accordance with the provisions of this
Agreement; and provided further that upon any extension of this Agreement,
the extension shall be upon the same Terms and Conditions as set forth in this
Agreement unless the parties mutually agree in writing to amend its provisions.
2. Consideration
a. YORK's Claims Administration annual fee shall be:
7 /1 /11 -6/30/12: $24,000
7 /1 /12 -6/30/13: $24,480
7/1/13 -6/30/14: $24,970
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Insurance Service Agreement
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b. The Claims Administration fees are payable monthly, due on the first (1 5t) and
payable by the tenth (10th) of the month.
c. It is recognized that the Claims Administration fee as negotiated each year
represents the expense of administering and adjusting Workers' Compensation
claims that arise out of CLIENT'S self-insured workers' compensation program
and that are assigned by the CLIENT to YORK. The Claims Administration fee
covers the expense involved in processing claims to their ultimate conclusion as
long as YORK continues to provide Claims Administration services pursuant to
the terms of this Service Agreement or any renewal or further Service
Agreement.
d. If the monthly open indemnity count exceeds 25, a surcharge of $82 per file
per month will be applied for those claim files in excess of 25. In addition,
CLIENT shall pay YORK an amount not to exceed $2,000 annually for general
administrative fees.
e. During the period of this contract, YORK will store, at its expense, closed files
for the period of five years from the date of closure. After this period, files will
either be returned to CLIENT or stored by YORK at CLIENT'S option and
expense. If stored by YORK, CLIENT will be charged a one-time inventorying fee
of S 1 . 00 per file and monthly storage at the greater of S 1 . 50 or our current
cost per box of files per month.
3. Responsibilities of YORK
a. Claims Administration
YORK agrees to provide claims service for CLIENT's Workers'
Compensation exposure in the State of California as required by the
regulatory bodies of said State and at a level acceptable to CLIENT.
b. Management Information System
(1) YORK agrees to maintain claims and cost data as well as estimates
of future claims liability on an individual claim basis.
(2) YORK will provide management information service to CLIENT as
agreed upon by the parties.
(3) YORK retains all ownership rights to its computer programs,
including any improvements and/ or additions made to such
computer programs during and/or in the course of YORK's
performance under this Agreement, whether or not such
improvements and/ or additions were made at the direction,
request or suggestion of CLIENT. However, CLIENT retains all
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Insurance Service Agreement
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ownership rights to the claim-related data. In the event of a
cancellation of YORK's service, CLIENT is entitled to a complete
electronic data file of all claims and payment information, as well
as a complete format of the electronic data file(s), and all written
records maintained by YORK on behalf of CLIENT.
c. Medical Cost Containment and Management
YORK agrees to provide medical cost containment and management
services through its affiliate, WellComp Managed Care Services, Inc.
("WellComp"). Services to be provided include, but are not limited to,
repricing of medical bills to the Official Medical Fee Schedule, repricing
of medical bills based on network contracts, pre-negotiated agreements
for medical services, Utilization Review pursuant to Labor Code 4610,
optional use of the WellComp Medical Provider Network established
pursuant to LC 4616, and nurse case management services.
4. Responsibilities of CLIENT
CLIENT shall report all workers' compensation claims and provide all
information available in a timely manner, cooperate and assist in the
investigation of claims as may be necessary to administer its claims. CLIENT
shall maintain a balance in the account administered by YORK sufficient to pay
all workers' compensation benefits, costs and expenses. CLIENT may refuse
the services of any vendor selected by YORK. CLIENT agrees that YORK retains
ownership of its programs, processes, forms and methods and will not use or
disseminate them without written consent of YORK.
5. Claim Payment Fund
a. The parties agree that YORK will pay claim expenses from a fund
established by CLIENT and funded by CLIENT. CLIENT will maintain the
fund at an amount sufficient to cover the expense of the Workers'
Compensation claims. YORK agrees to make its records available to
CLIENT for audit purposes at all times.
b. Claim expenses are defined as medical, temporary or permanent
disability, allocated claim expense, rehabilitation expense, claim, and
all other Workers' Compensation benefits payable to the injured
employees or dependents of CLIENT.
c. Allocated claim expense includes such costs as legal fees, court costs,
court reporters, expert witnesses, investigation, photocopy, subpoena,
photographic, fees to undercover operatives, depositions, bill review,
utilization review, and certain special costs as may be required. YORK
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Insurance Service Agreement
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may perform on-site copy service. Allowable photocopy charges are
billed to the file under allocated claim expense.
6. Termination
Either party may terminate this Agreement by providing written notice sixty
(60) days in advance to the other. In the event of termination, YORK will be
obligated to provide all data, records and information developed with respect
to CLIENT's business, including all loss records, to CLIENT or its designated
agent on the date established by CLIENT. YORK will provide the records in
good condition and will assist in any transition as may be desired by CLIENT.
7. Insurance Coverage
a. Blanket Fidelity Bond
YORK shall maintain a blanket fidelity bond (or equivalent insurance
such as Third Party Crime Insurance) in an amount not less than Two
Million Dollars ($2,000,000.00}, with an insurer or approved corporate
surety covering any and all principals, officers and employees involved in
performance of the Agreement and the trust fund (imprest) account.
b. Errors and Omissions Insurance
YORK shall maintain Errors and Omissions Insurance in an amount not
less than Two Million Dollars ($2,000,000.00) per occurrence and
aggregate.
c. Commercial General Liability Insurance
YORK shall maintain commercial general liability insurance in the
amount not less than Two Million Dollars ($2,000,000.00) which shall be
primary over any other insurance carried by CLIENT. A certificate of
insurance naming CLIENT as an additional insured shall be provided to
CLIENT.
8. General Conditions
a. YORK shall indemnify, hold harmless and defend CLIENT, its agents,
employees, assigns, successors, officers and directors against any and all
loss, damage, fines, liability, costs and expenses, including reasonable
attorney fees and costs that CLIENT may become obligated to pay due,
to the extent attributable to the negligent or otherwise wrongful acts or
omissions of YORK, its agents, employees, officers or directors. CLIENT
agrees to notify YORK immediately in writing of any claim, demand,
notice of liability or action. Notwithstanding the immediately preceding
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Insurance Service Agreement
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two sentences, YORK shall not be obligated to indemnify CLIENT, its
agents, employees, assigns, successors, officers and directors to the
extent that any such loss, damage, fines, liability, costs and expenses is
attributable to the negligent or otherwise wrongful acts or omissions of
CLIENT, its former claims administration service provider or any other
party.
b. CLIENT shall indemnify, hold harmless and defend YORK, its agents,
employees, assigns, successors, officers and directors against any and all
loss, damage, fines, liability, costs and expenses, including reasonable
attorney fees and costs that YORK become obligated to pay due, to the
extent attributable to the negligent or otherwise wrongful acts or
omissions of CLIENT, its agents, employees, officers or directors.
c. The services to be rendered by YORK are to be within the standards for
administration of workers' compensation claims. In the event CLIENT
directs YORK to follow a specific course of action in the handling of any
claim, it shall indemnify, hold harmless and defend YORK against any
loss, cost or expense, including reasonable attorney fees and costs,
incurred in any claim for damages related to that course of action.
Notwithstanding anything to the contrary herein, YORK shall not be held
responsible or liable for any obligations pursuant to agreements or
contracts between third parties and CLIENT.
d. Penalties and self-imposed increases resulting from the failure of CLIENT
to provide timely notice of claims (within seven days of CLIENT's
knowledge of injury) or such other employer obligations as awarded or
imposed pursuant to Labor Code Section 5814 and Labor Code Section
4650(d) are and shall be the sole responsibility of CLIENT, and CLIENT
agrees to indemnify, defend and hold YORK harmless from the imposition
of such penalties and self-imposed increases. Penalties and self-imposed
increases resulting from the negligent or otherwise wrongful acts or
omissions of YORK as claim administrator are and shall be the sole
responsibility of YORK, and YORK agrees to indemnify, defend and hold
CLIENT harmless from the imposition of such penalties.
e. The parties understand the administration of a self-insured workers'
compensation program requires the exchange of confidential medical
information between CLIENT and YORK in order to ensure the prompt
delivery of benefits and to evaluate the accommodation of work
restrictions, either on a temporary or permanent basis. CLIENT
acknowledges the provisions of Labor Code Section 3762 and agrees that
CLIENT's designated employees responsible for the administration of
CLIENT's workers' compensation program shall maintain the
confidentiality required and abide by the restrictions on dissemination of
claimants' medical information, records and reports. CLIENT's
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Insurance Service Agreement
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designated employees shall not disseminate medical information of
claimants in violation of Labor Code Section 3762. YORK makes no
representations whether any particular disclosure or dissemination of
medical information, reports or records by or between YORK and
CLIENT's designated employees is or is not prohibited by Labor Code
Section 3762, California Code of Civil Procedure Section 56, et seq., or
any other provision of State or Federal law governing the privacy and
confidentiality of medical information. In the event that a claim is made
as a result of the release of confidential medical information by YORK,
CLIENT authorizes YORK to pay all attorney fees and costs incurred in
defense of the claim as an allocated expense.
f. CLIENT agrees that any action to enforce the terms of this agreement or
resulting from a dispute between the parties shall be filed in Placer
County, California. In the event of such an action, the prevailing party
may, in addition to any other relief it obtains, recover its attorney fees
and court costs.
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Insurance Service Agreement
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g. This represents the entire agreement between the parties and may only
be modified in writing signed by both.
Accepted By: Accepted By:
CITY OF CUPERTINO, A MUNICIPAL
CORPORATION
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YORK RISK SERVICES GROUP, INC.
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Name: Jody A. Gray
Senior Vice President
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Title Orange, CA 92868
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