Staff Report
PREPARED BY: Lisa Velasco
Human Resources Director
Reviewed by: Town Manager, Assistant Town Manager, Town Attorney, and Finance Director
110 E. Main Street Los Gatos, CA 95030 ● (408) 354-6832
www.losgatosca.gov
TOWN OF LOS GATOS
COUNCIL AGENDA REPORT
MEETING DATE: 12/03/2019
ITEM NO: 4
DATE: November 21, 2019
TO: Mayor and Town Council
FROM: Laurel Prevetti, Town Manager
SUBJECT: Authorize the Town Manager to Execute an Agreement for Services with LWP
Claims Solutions to Provide Workers’ Compensation Third-Party
Administration Services Effective January 1, 2020 Through December 31,
2022 for a Total Amount Not to Exceed $171,357
RECOMMENDATION:
Authorize the Town Manager to execute an Agreement for Services with LWP Claims Solutions
(Attachment 1) to provide workers’ compensation third-party administration services effective
January 1, 2020 through December 31, 2022 for a total not to exceed amount of $171,357.
BACKGROUND:
The California Division of Occupational Safety and Health requires that all employers provide
workers’ compensation insurance protection for workers’ who are injured or ill as a result of
their employment to provide medical care and replace lost income. The Town of Los Gatos is
self-insured for workers’ compensation insurance and engages the services of a third-party
administrator to receive and evaluate employee claims, authorize and pay for medical care,
coordinate the payment of lost income, ensure the plan remains in compliance with state
regulations, provide training to managers and supervisors, determine appropriate reserves for
future medical care and permanent disability, and represent the Town in cases that are
elevated for evaluation before the Workers’ Compensation Appeals Board.
The Town last issued a request for proposals (RFP) for workers’ compensation third-party
administration services in 2010.
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SUBJECT: Agreement for Services with LWP Claims Solutions
DATE: November 21, 2019
DISCUSSION:
Due to the length of time since a formal RFP has been solicited for workers’ compensation
claims administration services, a new request was sent to vendors in July 2019. The request
was sent to twenty (20) vendors, including the Town’s current vendor, and posted on the
Town’s website. Five responses were received by the due date and after evaluation, three
finalists were invited to interview with a panel of Town representatives that are most closely
involved with workers’ compensation administration services. Based on the interviews, the
panel selected LWP Claims Solutions as a new vendor to provide workers’ compensation claims
administration services for the Town based on their record of providing high quality and strong
customer service commitment to public agencies. In addition, LWP Claims Solutions has a track
record of reducing costs associated with utilization reviews, collaborating with employees to
assist in a timely return to work, and reducing overall claims cost.
CONCLUSION:
Based on the outcome of the competitive RFP process for workers’ compensation third-party
claims administration services, staff recommends that Council authorize the Town Manager to
execute a new Agreement for Services with LWP Claims Solutions.
FISCAL IMPACT:
LWP Claims Solution has committed to a not to exceed claims administration fee amount of
$60,500 for year one of the agreement which is an overall increase of $5,848 for the remainder
of FY 2019/20. Staff will recommend a mid-year budget adjustment to factor the additional
cost into the FY 2019/20 Operating Budget. The costs for year two and year three of the
agreement will be built into the Operating Budgets for FY 2020/21 and FY 2021/22.
ENVIRONMENTAL ASSESSMENT:
This is not a project defined under CEQA, and no further action is required.
Attachment:
1. Agreement for Services