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File #: 19-0383    Version: 1
Type: Agenda Item Status: Approved
File created: 3/6/2019 In control: Board of Supervisors
On agenda: 3/12/2019 Final action: 3/12/2019
Title: Human Resources Department, Risk Management Division, recommending the Board approve and authorize the Chair to sign a budget transfer increasing use of Risk Management Internal Service Fund fund balance and expense appropriations by $3,455,349 within the Risk Management Division Workers' Compensation Operating Budget to fund claims incurred prior to the transition to the Primary Workers' Compensation Program. (4/5 vote required) (Est. Time: 5 Min.) FUNDING: Risk Management Internal Service Fund.
Attachments: 1. A -Workers' Comp Budget Transfer 19-0383, 2. Executed Budget Transfer
Related files: 18-1218
Title
Human Resources Department, Risk Management Division, recommending the Board approve and authorize the Chair to sign a budget transfer increasing use of Risk Management Internal Service Fund fund balance and expense appropriations by $3,455,349 within the Risk Management Division Workers' Compensation Operating Budget to fund claims incurred prior to the transition to the Primary Workers' Compensation Program. (4/5 vote required) (Est. Time: 5 Min.)

FUNDING: Risk Management Internal Service Fund.
Body
DISCUSSION / BACKGROUND:
On August 28, 2018, the Board approved first-dollar workers' compensation insurance coverage through the Primary Workers' Compensation Program, covering new claims beginning September 1, 2018. The cost of the prorated premium was $3,455,349 for the 2018-19 Fiscal Year.

As part of this action, the Board eliminated the $300,000 self-insured retention for workers' compensation. However, the County is still responsible for costs related to those existing “tail” claims for industrial illnesses or injuries that occurred prior to the change in coverage.

For Fiscal year 2018-19, a full year of claims through York was budgeted in order to provide funding for any claims of $300,000 or less. With the change to fully-insured from the first dollar, it was anticipated that the tail claims cost would decrease within the fiscal year.

Due to the payments for the tail claims, the workers' compensation program expenses are projected to exceed the budgeted amounts prior to the end of the fiscal year. While over time the costs of these tail claims will decrease, due to variable time periods and costs of the claims, as well as the payment for new insurance coverage, it is necessary to make use of existing Risk Management Internal Service fund balance.

For the current fiscal year, the Risk Management Internal Service Fund is funded at approximately 90% confidence level; in the past the Board has approved funding at a 70% confidence level. Therefo...

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