3.7. SR 09-11-2000-~ity of
MEMORANDUM
Item #3.7.
TO:
FROM:
DATE:
SUBJECT:
Mayor & City Council
Lori Johnson, Finance Director
September 11, 2000
Workers Compensation Insurance Renewal
The League of Minnesota Cities Insurance Trust (LMCIT) has provided a
worker's compensation insurance quote to the city for our contract that
renews on October 1, 2000. The quote is based on estimated payroll for the
contract period and is adjusted at the end of the contract based on actual pay.
A copy of the quote is attached for your review.
In the past the city has carried a $5,000 per occurrence deductible on this
policy and in return receives a premium credit. This year the premium credit
is $13,095. Increasing the deductible to $10,000 would result in an additional
premium savings of $4,365. Over the past two contract years, the city has
saved approximately $6,000 after paying the deductible costs.
The city also participates in a managed care program for which the city
receives a five percent or $4,850 premium credit. The city will continue to
contract with Corvel Corporation for managed care services.
Action Requested
The City Council is asked to approve the renewal with LMCIT for worker's
compensation insurance for October 1, 2000 to October 1,2001. This contract
would include a $5,000 per occurrence deductible. If the council wishes to
change the per occurrence deductible, this item may be removed from the
consent agenda for council discussion on the deductible amount.
13065 Orono Parkway · P.O. Box 490 · Elk River, MN 55330 · TDD & Phone: (612) 441-7420 · Fax: (612) 441-7425
League of Minnesota Cities Insurance Trust
Group Self-Insured Workers' Compensation Plan
145 University Avenue West St. Paul, MN 55103-2044 Phone (6Sl) 215-4173
Notice of Premium Options for Standard Premiums of $50,000 - $100,000
The "C~" Aoreement No.:
ELK R ! VE-R. EL,k] R ! VER UT [ L [ T TEE. Agreement Period:
HF:~ & ED,A From:
PO BOX 4.90. 13065 ORONO PAFd-':.'WA'f To:
ELK RIVER MI'~ 55330-0490
Enclosed is a quotation for workers' compensation deposit premium. Deductible options are now available in return
for a premium credit applied to your estimated standard premium of $ 76,7<..~. . The deductible will apply
per occurrence to paid medical costs only. There is no aggregate limit.
As an altemative, cities with a standard premium in excess of $25,000 may select from several retro-rated premium
options. The final net cost under the retro-rated option equals the audited standard premium times the minimum
factor plus losses and all loss-related costs, not to exceed the audited standard premium times the maximum factor.
The net cost for each retro option based on your estimated payroll, would be between the minimum and maximum
amounts shown below, depending upon your losses. Adjustments will be made approximately six months after the
close of your agreement year and annually thereafter until all claims are closed. These adjustments will be based
on audited payroll amounts and reserved as well as paid losses.
Please indicate below the premium option you wish to select. You may choose only one and you cannot change
options during the agreement period.
~PTIONS
NET DEPOSIT PREMIUM
1 [] Regular Premium Option
Deductible Options:
Deductible Premium Credit
per Occurrence Credit Amount
2 [] $250 3% :='--7..'t ~_',~ ,'30,;.,-'?...'E~
3 [] 500 4.5%
4 [] 1,000 6%
5 [] 2,500 10%
6 [] 5,000 13.5%
7 [] 10,000 18%
Retrospectively Rated Premium Options:
Retro-Rated Est. Minimum Maximum
Minimum Factor Premium Factor
8 [] 67.0% ~ !'..,::~.,. 130%
9 [] 57.3% ~EC-..Ot. 150%
10 [] 43.2% ~0,'-2. 200%
Est. Maximum (See#1 above
Premium for net deposit
~_ t .~7~-.~. premium)
This should be signed by an authorized representative of the city requesting coverage. One of the above options must
be selected. Please return a signed copy of this notice to us with payment and make checks payable to the LMCIT.
gnature Title Date
For more information on the premium options that apply to Your city, refer to the enclosed brochures.
LM4503 (8/99)
League of Minnesota Cities Insurance Trust
Group Self-Insured Workers' Compensation Plan
145 University Avenue West St. Paul, MN 55103-2044 Phone (651) 215-4~73
Self-Insured Workers' Compensation Quotation
(R£NEWAL ~f Am-eement No. 02-005;5!3-!4)
RIVER, ELK RIVER UTiLITiES.
! 0/01/'2,}00 .t 0/01/~001
EST ! MATED DEF'OS i T
CODE RATE PA'f ROLL F'F:E?! I UH
SEE ATTACHED SCHEDULE FOR DETAILS
Manual Premium 124356.
Exoerience !dodification
Standard F?smium 96998.
Manacled Care Credit S.00~ 4850.
O~ductibie Credit O~ O.
Premium Discount
Discounted Standarm Premium 8340S.
Net Deposit Premium ~340~.
The foregoing quotation is for a deposit premium based on your estimate of payroll. Your final actual
premium will be computed a~er an audit of payroll subsequent to the close of your agreement year and will
be subject to revisions in rates, payrolls and experience modification. While you are a member of the
LMCIT Workers' Compensation Plan, you will be eligible to participate in distributions from the Trust
based upon claims experience and earnings of the Trust.
If you desire the coverage offered above, please complete the enclosed "Notice of Premium Options" and
return it and your check for the deposit premium (made payable to the LMCIT) to:
BerkleyRiskAdministrators Company, LLC
PO Box 581517
Minneapolis, MN55458-1517
LM 4410 (8/99)