Agenda - Council - 01/12/1993 - Laserfiche WebLink

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Case #5 Updated for distribution at the Council Meeting of 1/12/93 WORKERS' COMPENSATION, PROPERTY/CASUALTY INSURANCE By: Sandra Ashley Helling, Finance Officer Background: The City has not yet received the quotation from the League of Minnesota Cities Insurance Trust for the City of Ramsey's 1993 Property/Casualty Insurance. This information will be brought to Council at a future meeting. As previously reported, Ramsey's 1993 "mod" for Workers' Compensation was reduced from 1.07 to 1.00 by Berkley, the administrator of the League of Minnesota Cities Workers' Compensation Plan. The net deposit premium is $58,620 which is approximately 4.7% of estimated total payroll. The final premium will be based on actual payroll by function for 1993, and the rates per function vary from .5% (clerical) to 9.7% (building maintenance) of payroll. Observations: For 1993 the League is offering premium reduction for deductibles. Staff has reviewed the claim historical information for the last five years, and the following is a summary of our claim history: Number of Total Medical Average Claims Cost Cost/claim 1988 1 $162 $162 1989 ~ 2 .3,058 $1,529 1990 3 20,587 $6,862 1991 5 1,165 $233 1992 2 279 $139 5 Year Total 13 $25,251 5 Year Average 2.6 $5,050 $1,785 The average cost per claim should be further clarified as during 1989, the medical cost of one claim was $2,711 and during 1990 one claim was $20,392. But for these two claims, the remaining claim in 1989 was $347 and 1990 would have averaged $98. The deductibles and premium reduction being offered for 1993 are: Standard Deductible Prcmi~nn Re0tJCfi0n Per Occurrence Amount % $250 $1,287 2% $500 $2,574 4% $1,000 $3,217 5% $2,500 $5,791 9% $5,000 $7,722 12% $10,000 $10,939 17% While the higher deductibles offer more significant up-front premium reductions, one serious claim (as experienced in 1989 and again in 1990) would nullify this possible savings. In addition, as our firefighters and police officers are, by nature of their work, exposed to a higher level of physical risk, claims with medical costs in excess of $500 or $1,000 are not uncommon.