11/24/1992 - Laserfiche WebLink

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r NOV 2 4 1992 TO: James E. Chandler, County Administrator THRU: Jack Price, Personnel Director � FROM: Beth Jordan, Risk Manager DATE: 18 November 1992 BOOK 88 PACE 151-7 BUDGET AMENDMENT 004 - SUBJECT: Change in Sheriffs Workers' Compensation Coverage On October 27,1892, we were notified by LL Spencer of the Sherfff's Office that effective November 1 their workers' c:omper>sation coverage through the County's self -Insurance pod would terminate and they would purchase commercial overage through Hurt Insurance Group (HIG), Tallahassee, the huximbent broker for the Sheriff's polio professional liability and automobile insurances. Although we have since obtained from HIG a copy of their binder, we do not know arty details about their coverage limits, provisions or type of policy. Through the self4risurance program begun by the Board four years ago, the County formed its own Internal Pte. Rather than pay first -dollar premiums to commercial insurers, the County opted to set aside funding internally, based upon an annual actuarial study, with any surplus funds used to maintain the fund and to reduce future year contributions. With the 1982-93 budget, the County realized a substantial reduction in Its funding requirements, allowing for the allocation of available funds to other County programs Through the self-insurance fund, constitutional officers and Board departments have combined their risks, sharing them proportionately based upon their loss exposure. As such, some have benefitted In greater proportion than others during any given year, but all have benefitted in the long-term by allowing the County to fund its risks prudently and not to pay first -dollar insurance premiums which must Include carrier. profits, State required guaranty fund contributions, expense constants, etc. While the Sheriffs withdrawal from the pod has no immediate detrimental effect upon the Board's Program, we are unsure about the long-term effects on the overall County budget The Sheriffs Office, with approximately one fourth of the workers' compensation payroll, Incurs nearly one-fourth of the County's Injuries with an accompanying onedhird of all workers' compensation costs. Only three years ago, that same employee population accounted for over one -hall of the program's costs. If the new Program Is monitored closely, with effective kms prevention and loss control techniques, it may work well. If, however, it Is primarily administered by the third party claims administrator which is paying claims for the prance company, its experience may revert to the position it was in three years ago and the Premium costs will reflect that experience. Additionally. If the Sheriff desires to re-enter the pod based upon adverse experience, the County's excess insurance premiums and State self -insurer assessment fees would increase based upon the poor experience of that particular unit At this time, staff recommends that the Board consider adoption of a policy which prohibits pool members who have dropped out of the pool based upon perceived sholt46nn savings from having the right to rejoin the pool WOW Board approval. Staff also recommends the Board approve the attached budget amendment which moves workers' compensation funding into the Sheriffs budget. Administrator Chandler requested the budget amendment be postponed until a later date because there is a question about distribution or the movement of funds into various divisions within the Sheriff's Department. 50