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{C~BAR~USCOU~J <br /> <br />MEMORANDUM <br /> <br />To: <br /> <br />From: <br /> <br />Date: <br /> <br />Subject: <br /> <br />Board of Commissioners <br /> <br />Blair Bennett ~ <br /> <br />August 27, 2001 <br /> <br />Status Report on Workers' Compensation Fund <br /> <br />The decision was made beginning July 1, 1994 to become self-insured for Workers' <br />Compensation. The sharp increases in insurance premiums for Workers' Compensation and the <br />moderate claims history we had experienced were the factors leading us to make the decision to <br />become self-insured. This decision was not taken lightly, realizing that becoming self-insured <br />carried a liability risk to the County. However, considering ali these factors, we did elect to <br />become self-insured. This year again, the risk/reward scenario had a positive outcome, as <br />evidenced in the attached report. <br /> <br />For the fiscal year we actually paid out $316,455.28 in claims. These payments were allocated <br />back to the particular year in which the claim actually occurred. Those allocations were as <br />follows: 1998 - $125,323.49, 1999 - $18,413.35, 2000 - $92,123.24 and 2001 - $80,595.20. <br />Notice this year (FY 2001), that the interest earned on the Workers' Compensation Fund nearly <br />paid the insurance consultant, excess insurance and claims paid for the current year. Also notice <br />that we now have a cash balance reserve amounting to $1,668,234. If we were paying annual <br />premiums for workers' compensation to an insurance company based on our payroll of <br />$30,968,056, our premium would likely be approximately $1,000,000 versus we are only setting <br />aside about $459,000 in fiscal year 2001. Now after seven years of experience with the self- <br />funding program, we are planning on having an actuary study to be completed this winter to help <br />us determine the cash reserve needed to fully fund this program. <br /> <br />Compensation Claims Solutions, our claims administrator, located here in Concord, has done an <br />excellent job of actively working and monitoring the claims to return injured employees back to <br />work as quickly as possible. Also, Everette Arnold, our insurance consultant, has been invaluable <br />by offering advice and experience from his years of being in the self-insurance business advisory <br />capacity. We will continue to monitor this fund and its claims closely, and hope that its success <br />will continue. <br /> <br /> Finance Department <br />Box 707 · Concord, NC 28026-0707 ,, (704) 788-8104 <br /> <br /> <br />