DEPARTMENT: Office Of Risk Management
FILE TYPE: Consent Action
TITLE
title
Authorization To Execute Contract Amendment 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 second contract amendment with SFM Risk Solutions, Inc. (SFM) 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, since October 2013.
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 exceptional customer service and management of County employee's workers compensation claims. Staff has found SFM to be extremely responsive to Dakota County's needs.
In 2015, Risk Management completed a survey of similarly sized, self-insured entities and worked with the County's insurance broker to identify vendors to solicit proposals for TPA services. Three TPA vendors were sent requests for proposals: SFM, Corvel, Inc. and Gallagher Basset. At that time, SFM provided the most competitive quote for TPA services, and has maintained a modest 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 to amend the contract (a second one-year extension of the five-year contract executed in 2017). SFM's proposal reflects an annual premium increase of three percent which is consistent with the past three years.
SFM's proposal for a one-year amendment for third party administration of workers' compensation claims is $42,868 for 2024.
Staff intend to issue an RFP for TPA services workers' compensation claims in 2024.
RECOMMENDATION
recommendation
Staff recommends the Board of Commissioners authorize the Enterprise Finance and Information Services Director to execute a one-year amendment to the contract with SFM with an annual cost reflecting a cost-of -living increase. The amendment is for $42,868 for the term of January 1, 2024, through December 31, 2024, which increases the total contract amount to $274,743.
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EXPLANATION OF FISCAL/FTE IMPACTS
Funds are included in the Office of Risk Management Workers' Compensation TPA recommended 2024 budget in the amount of $42,868 for the one-year amendment to the contract.
☐ None ☒ Current budget ☐ Other
☐ Amendment Requested ☐ New FTE(s) requested
RESOLUTION
body
WHEREAS, Dakota County purchases services for the administration of workers' compensation claims; and
WHEREAS, by Resolution No. 17-606 (November 28,2017), the Dakota County Board of Commissioners authorized the execution of a five-year contract with SFM Risk Solutions, Inc. (SFM); and
WHEREAS, by Resolution No. 22-553 (December 13,2022), the Dakota County Board of Commissioners authorized the Contract Amendment with SFM extending the expiration date to December 31, 2023; and
WHEREAS, the staff from the Office of Risk Management evaluated available services through a review of the marketplace for third party administration (TPA) services; and
WHEREAS, the results of the review showed that SFM continues to be cost competitive for workers' compensation claim TPA services; and
WHEREAS, the Office of Risk Management staff have been satisfied with the TPA services for Dakota County's self-insured workers' compensation claims; and
WHEREAS, the Risk and Homeland Security Manager recommends the amendment of the current contract for one additional year with SFM for administration of workers' compensation claims.
NOW, THEREFORE, BE IT RESOLVED, That the Dakota County Board of Commissioners hereby authorizes the Enterprise Finance and Information Services Director to execute a second contract amendment with SFM Risk Solutions, Inc. for $42,868 for the term of January 1, 2024, through December 31, 2024, increasing the total contract amount to $274,743.
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PREVIOUS BOARD ACTION
22-553; 12/13/22
ATTACHMENTS
Attachment: Pricing Schedule V
BOARD GOALS
☒ A Great Place to Live ☐ A Healthy Environment
☐ A Successful Place for Business and Jobs ☐ Excellence in Public Service
PUBLIC ENGAGEMENT LEVEL
☐ Inform and Listen ☐ Discuss ☐ Involve ☒ N/A
CONTACT
Department Head: Jenny Groskopf
Author: Jenny Groskopf