DEPARTMENT: Office Of Risk Management
FILE TYPE: Consent Action
TITLE
title
Authorization To Execute Contract With SFM Risk Solutions, Inc. For Administration Of Workers’ Compensation Claims
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PURPOSE/ACTION REQUESTED
Authorize the Enterprise Finance and Information Services Director to execute a contract with SFM Risk Solutions, Inc. for administration of workers’ compensation claims.
SUMMARY
Since 1990, Dakota County has been self-insured for workers’ compensation claims and has contracted for administration of claims through a third-party administrator (TPA). Dakota County has utilized the services of SFM Risk Solutions, Inc. (SFM), since October 2013 when our previous long term TPA- RTW, Inc. (RTW) abruptly exited the TPA market.
SFM is the leading workers' compensation insurer in the midwest, serving businesses of all sizes and types in 16 states. Since assuming our business in 2013, SFM has provided quality customer service and management of County employee’s workers compensation claims. Staff has found SFM to be responsive to Dakota County’s needs. At the County’s request, SFM has provided a dedicated claims manager. A dedicated claims manager provides a single point of contact for conducting business and strong communication lines which is especially important in the management of lost time claims.
On September 3, 2024, staff issued a Request for Proposal for Third Party Administration of Workers’ Compensation Claims. Two vendors responded to the solicitation and proposals were reviewed and rated by staff based on qualifications, experience of the proposer, services included references, intangibles, and service fees. Two TPA vendors responded to the requests for proposals: SFM and PMA, companies.
SFM provided the most competitive quote for TPA services, maintaining a cost-of-living increase in annual costs. SFM has a close working relationship with several other counties and municipalities in Minnesota and understands the complexities of handling workers’ compensation for government entities. Dakota County has been pleased with the services provided by SFM and the claims handling of our larger and more complex workers’ compensation claims.
SFM has offered the County a five-year contract from 2025 through 2029. SFM’s proposal reflects a 7.12 percent premium increase for 2025 at a cost of $44,583 and cost increases for each of the next four years. The TPA cost trending attachment reflects annual TPA costs and percent increase from 2020-2030.
RECOMMENDATION
recommendation
Based on the positive working relationship between the County and SFM and an annual premium reflecting only a cost-of-living increase, staff recommends the Board authorize the Enterprise Finance and Information Services Director execute a five-year contract with SFM for the term of January 1, 2025, through December 31, 2029, in the total amount of $239,498.
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EXPLANATION OF FISCAL/FTE IMPACTS
Funds are included in the Office of Risk Management Workers’ Compensation TPA recommended 2025 budget in the amount of $44,583 for the first year of the contract. The contract includes services for 2025 through 2029.
☐ None ☒ Current budget ☐ Other
☐ Amendment Requested ☐ New FTE(s) requested
RESOLUTION
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WHEREAS, Dakota County purchases services for the administration of workers’ compensation claims; and
WHEREAS, the current contract with SFM Risk Solutions, Inc. will expire on December 31, 2024; and
WHEREAS, the staff from the Office of Risk Management evaluated available services through a review of the marketplace for third party administration services (TPA); and
WHEREAS, the results of the review showed that SFM Risk Solutions, Inc. continues to be cost competitive for workers’ compensation claim TPA services; and
WHEREAS, the Risk and Homeland Security Manager recommends SFM, Inc. as the Dakota County’s provider of workers’ compensation claims management services.
NOW, THEREFORE, BE IT RESOLVED, That the Dakota County Board of Commissioners hereby authorizes the Enterprise Finance and Information Services Director to execute a contract with SFM Risk Solutions, Inc., for a five-year term, January 1, 2025, through December 31, 2029, in an amount not to exceed $239,498, subject to approval by the County Attorney's Office as to form.
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PREVIOUS BOARD ACTION
23-550; 11/28/23
ATTACHMENTS
Attachment: Workers’ Compensation TPA Annual Contract Trending
BOARD GOALS
☒ A Great Place to Live ☐ A Healthy Environment
☐ A Successful Place for Business and Jobs ☐ Excellence in Public Service
CONTACT
Department Head: Jenny Groskopf
Author: Sarah Fenske