«Second, California`s calHR legislature should give the authority to obtain the data needed to compare insurance costs with the costs of the main contract,» Moorlach said. Sacramento, CA — Ten California public authorities paid $20 million more for workers` compensation insurance than they could have chosen another insurer, according to a report released Thursday by the California state audience. Nearly 90% of them choose to do so with a master`s contract negotiated by the California Department of Human Resources (CalHR) on their behalf with the State Insurance Fund. Under the Captain`s Agreement, the public authorities reimburse the sovereign wealth fund for the actual cost of workers` compensation rights instead of paying for insurance or maintaining a reserve of compensation for workers. According to CalHR data, nearly 190 agencies granted benefits through the master`s contract in the 2017-18 financial year, while 32 agencies decided to purchase insurance from the State Fund. The State Comptroller then audited the costs of 10 of the 32 agencies that purchased insurance from the sovereign wealth fund in the 2017-18 fiscal year. It found that each of these agencies would always have paid more insurance premiums than it would have paid if it had provided benefits under the framework contract. It estimated that these ten agencies paid an average of $US 5.7 million per year in bonuses from the 2013-14 financial years to 2017-18, but that they had paid on average less than 1.6 million $US per year under the master`s contract. If the 10 agencies had used the captain`s agreement, they could have saved the state more than $20 million during the period that the auditor verified.
CalHR is not required, however, to assist agencies in deciding whether purchasing workers` compensation insurance or using the main contract is likely to be less costly for them. The State Fund does not always provide sufficient time for governments to review applications for settlement authorization prior to mandatory comparison conferences. The sovereign wealth fund must obtain the authorisation of the agencies before providing the public authorities with the authorisation, unless they allow the sovereign wealth fund to settle cases without prior authorization. The sovereign wealth fund and several of the controlled agencies have indicated that the sovereign wealth fund should make 30 days available to agencies to review resolution requests before conciliation conferences. However, the sovereign wealth fund does not have 30 days to respond to claims for 8 of the 15 applications reviewed. In order to ensure that all public bodies provide workers` compensation in the most cost-effective manner possible, CalHR should provide every five years to any agency that acquires workers` compensation insurance a cost-benefit analysis comparing the cost of purchasing this insurance through the public fund to the cost of coverage through the main contract. State fund. Mr. CalHR agreed to implement this recommendation. The State Fund should develop and follow a directive on the provision of authorisation applications for agency management at least 30 days before comparative conferences.
The sovereign wealth fund did not accept the recommendation of the legal auditor and indicated that it would endeavour to comply with a directive that the sovereign wealth fund should close claims as soon as possible. Source: WorkCompAcademy.com state law allows governments to decide how their workers have access to workers` compensation. According to the auditor, nearly 90 percent of them choose to do so with a master`s contract that the California Department of Human Resources negotiated on their behalf with the State Compensation Insurance Fund. In accordance with the main agreement, the sovereign wealth fund manages, processes and pays workers` benefits to the participating public authorities, and the agencies reimburse the public funds for the actual costs of the services provided.