Ten months into self-funded worker's compensation, the City of Claremore is on trend to save some $300,000.
In July, 2016, the city made the switch to self-funded, according to Jonah Humes, assistant to the city manager, while previously they used the services of Oklahoma Municipal Assurance Group.
OMAG is a providor of insurance and risk management and is utilized by municipalities across the state.
Over four years, the cost averaged $616,000, according to Humes, who added that one year it spiked to $636,000. Ultimately the city felt they would be money ahead to self-fund the claims — and so far they are right.
“From July to April we've had 231 claims, and 36 total claimants, or individuals filing those 231 claims,” Humes said. “At a total cost of $80,000.”
The city departments with the largest percentage of claims are water/sewer, 24 percent, fire, 27 percent and sanitation, 23 percent. The police department trailed with only 8 percent of the total claims being filed in their department.
Actual expenditures from July to April totaled $267,000, Humes told the council.
Compared to the $636,000 previously spent, savings is looking to come in around $300,000, though Humes said this is always subject to change.
City Manager Jim Thomas said they anticipate the switch will yield some savings in certain years, and a bit more in others. To that end, the fiscal year 2018 city budget includes $600,000 in a restricted account strictly for worker's compensation claims, Thomas said. This, he hopes, will allow the city to build up a reserve fund for years with increased claim expense.
“If we feel like there may be fraud going on we can hire our own fraud investigation. And we hire our own attorney to represent us in the worker's claim court. We didn't have that kind of transparency with OMAG,” Thomas said.
City Attorney Bryan Drummond pointed out another way the switch is advantageous to the city... “It allows us to track injuries, note any trends and make any change to procedures or safety equipment necessary to prevent future injuries.”