TO: Honorable Mayor and Members of the City Council
THRU: Tom Kisela, Interim City Manager
FROM: Wayne Winthers, Interim City Attorney
1. Subject
title
Agreement with AdminSure, Inc. for workers’ compensation third-party administration services.
body
2. Summary
Request to authorize a $1,417,164 purchase for a five-year term with AdminSure, Inc. for the administration of workers’ compensation program and processing, evaluation, adjusting, and handling of workers’ compensation claims against the City.
3. Recommended Action
recommendation
Approve the agreement and purchase for the City’s workers’ compensation third-party claims administration services with AdminSure, Inc. in the amount totaling $1,417,164 for a five-year term from July 1, 2025, to June 30, 2030.
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4. Fiscal Impact
The expense for this service in Fiscal Year 2025-2026 is $266,928 and will be funded through the Workers’ Compensation Fund (730):
730-1306-50202 Worker’s Compensation
5. Strategic Plan Goals
Goal 2: Enhance Economic Development and Achieve Fiscal Sustainability.
6. Discussion and Background
The City’s third-party administration services is contracted between California Insurance Pool Authority (CIPA) on behalf of the City and AdminSure, Inc. (AdminSure). The City of Orange is a member of CIPA, which operates within the guidelines of the Joint Powers Authority to self-fund the Workers’ Compensation insurance program. This program requires the professional services of a Third-Party Administrator (“TPA”) to administer benefits.
Member cities of CIPA voted to remain with AdminSure; the current agreement came to an end on June 30, 2025. CIPA renegotiated the new agreement on behalf of the City of Orange, as well as all the participating member cities. The proposed agreement includes a 3% increase, effective every July 1 of each year of the proposed five-year term.
The services provided by AdminSure include all aspects of workers’ compensation administration in compliance with the applicable Workers’ Compensation laws for the State of California, including monitoring claims, setting reserves, authorizing medical treatments, processing bills, and all reporting requirements. The proposed agreement will end on June 30, 2030, which can be renewed, renegotiated, or re-bid. The Agreement automatically renews from year-to-year subject to termination by either party at any time during the life of the Agreement, providing sixty (60) days written notice. A copy of the proposed agreement is attached.
To ensure continuity of service and based on the competitive pricing and level of service provided, it is recommended that the City Council approve the purchase of services with AdminSure for the five-year term. AdminSure has provided TPA services to the City since 2018.
In consideration of the services provided, below is the breakdown of the negotiated fees for the five-year term:
|
Fiscal Year |
Monthly Fee |
Number of Months |
Annual Fee |
|
1: 7/1/25-6/30/26 |
$22,244 |
12 months |
$266,928 |
|
2: 7/1/26-6/30/27 |
$22,911 |
12 months |
$274,932 |
|
3: 7/1/27-6/30/28 |
$23,599 |
12 months |
$283,188 |
|
4: 7/1/28-6/30/29 |
$24,307 |
12 months |
$291,684 |
|
5: 7/1/29-6/30/30 |
$25,036 |
12 months |
$300,432 |
|
|
|
Total fee for a 5-year term |
$1,417,164 |
7. ATTACHMENTS
• Agreement for Claims Administration Services between AdminSure, Inc. and California Insurance Pool Authority.