LEADING THE WAY TO A SAFE AND HEALTHY SCHOOL WORKPLACE

Transcription

1 Annual Report LEADING THE WAY TO A SAFE AND HEALTHY SCHOOL WORKPLACE 550 Ellinwood Way, Pleasant Hill, CA Phone: 1 (866) Fax: (925)

2 JPA ADMINISTRATION 2015/16 Member Letter July 1, 2016 marked 39 years since the formation of the Contra Costa County Schools Insurance Group for the purpose of providing self-insurance for workers compensation to the member districts, and 21 years since self-administration! This past March, the Board of Directors had a Strategic Planning Workshop, during which the members revised the CCCSIG Mission/Vision Statements and created long-term Strategic Priorities that will be our guidepost for shaping the future of CCCSIG. By being proactive to injury trends and the needs of members, CCCSIG has made many changes over the years within the programs and services we offer. To continue to be responsive and adapt to changing needs, there are two areas of operations we continue to focus on - technology and communications - as they enhance our ability to support our member districts and work towards our Mission. Through greater integration of technology in our health and safety services, we are able to reach more employees to provide information about our prevention and education programs and services. In claims administration, we continue to explore new technology platforms that would streamline internal work functions and create a more efficient infrastructure between CCCSIG and member districts. In the last few years we have seen changes within our member districts, with individuals who have been connected for many years to CCCSIG retiring or moving to other school districts outside of Contra Costa County. With so many new individuals, we have the opportunity to share the history of CCCSIG, demonstrate the benefits of membership and illustrate our commitment to our members. CCCSIG looks forward to the future as we work together with member districts to continue to ensure a safe and healthy school workplace. Sheri Gamba, Board President, Associate Superintendent/Business Services/West Contra Costa USD Bridget Moore, Executive Director/Contra Costa County Schools Insurance Group Claims per Million $ of Payroll Workers Compensation Premium Contributions (Millions) *Estimated

3 JPA ADMINISTRATION Ultimate Estimated Incurred Costs & Total Incurred Costs (as of 6/30/16) FINANCIAL UPDATE 2015/16 It s been nine years since the economic downturn started, and our Member Districts have dealt with the budget cuts and other financial issues that have ensued over the following years. Things are starting to look up, but the effects of the downturn are still being felt, and may continue to be for the next couple of years or more. CCCSIG is proud to have been able to help our members during these difficult times, returning just under $13.4 million of equity, and we are hoping to continue to be a bright spot for the districts financially in the future! Since ending the 2008/09 year with a Net Position (Equity) of $24.7 million, CCCSIG has dealt with multiple issues that have affected the equity of our agency. Due to the fact that it may take 35 years or more for CCCSIG to pay out the claims costs for any given fiscal year, CCCSIG is able to invest the remaining premiums to increase the funds available for future payments. This allows us to discount our claims liabilities, which lowers the liabilities to account for the anticipated future year interest earnings. CCCSIG had used a discount rate of 4% up until 2009/10 (with historical investment earnings being even higher than that rate); however the investment market was obviously greatly affected by the downturn, and this resulted in having to lower our discount rate over the next few years to 2.79%. This reduction resulted in an increase in our claims liabilities, which decreased our equity by $4.8M. In 2014/15, GASB 68 required agencies to record pension liabilities on their financial statements, which for CCCSIG meant a reduction in equity of an additional $2.0 million. Having returned the equity to our members, along with the lowering of the discount rate, and the GASB 68 liabilities, CCCSIG could have had our equity lowered by $20.0 million over this time period. Fortunately, we continued to have strong operational results through these years, including a $5.1 million surplus from 2015/16, which totaled $18.6 million. This resulted in our Net Position ending up only being lowered by $1.4 million since 2008/09, ending 2015/16 at $23.3 million! For 2016/17, CCCSIG s Executive Committee has chosen to set the base rate at $2.32, which is lower than the 80% Confidence Level actuarially determined rate of $2.54, and returns an additional $2.2 million in equity to our members. As we are owned by our Member Districts, CCCSIG s Executive Committee and Board of Directors can continue to make the decisions that are the most beneficial to our members.

4 CCCSIG Financial Overview Fiscal Year 2015/16 CCCSIG is a JPA (Joint Powers Authority) which allows government agencies to pool their purchasing power to achieve lower costs in areas such as Workers Compensation insurance. Our rates are determined by an Actuary, who takes a look at the historical loss rates of the Group, along with the Districts estimated annual payroll, to determine how much premiums need to be collected to cover the anticipated claims for that year. The Actuary will discount the total expected claims costs to recognize that the claims may not be fully paid out for up to 30 years or even longer, which means that a good portion of the premiums will be available to earn interest over that time. By discounting, the Actuary may calculate that it is necessary to collect $20M in premiums, even though the total expected claims costs may be $24M, recognizing that the funds will earn $4M in interest before all the claims must be paid. Each District s premium is calculated based on the formula on page six. The Actuary determines the Ex-Mods (Experience Modification factors) for the individual Districts by looking at their claims experience history for the previous five years and comparing it to the Group s average over that same period. The base rate for the Agency is determined by applying the individual Ex-Mods to generate the necessary premiums. Once the estimated premiums are determined for each district, they are collected based on the following schedule: 1 st Installment = 50% of estimated premium due July 1 st 2 nd Installment = 30% of estimated premium - due December 1 st 3 rd Installment = 20% of estimated premium due March 1 st At the end of each fiscal year, the Districts report their actual payroll to CCCSIG, who then either generates an invoice for additional premiums if the payroll ended up being higher than estimated, or gives a refund if the payroll was lower than estimated. In 2005, CCCSIG ended the year with a Net Asset Deficit of $10M. This deficit was caused by several events over the prior 10 years. The first was that the CA Workers Compensation market, as well as the nationwide market, experienced a huge unexpected increase in claims costs beginning in the late 90 s. These additional costs created a large financial strain on all WC insurance companies, as past policy years experienced claims costs that were far greater than the amount of premiums that had been collected for those years. These unexpected costs were not immediately noticeable as claims develop over several years. At the same time that this downturn began, there was a trend with JPA s of giving rebates to their members, as they found themselves with what appeared to be excess funds because the prior years costs had not developed as high as originally expected. CCCSIG declared rebates in 1997, 1998 and 2000 totaling $20M. What is important to remember is that the agencies rely not only on having the premiums they collected available to pay claims costs, but on the interest those premiums earn in the interim. So not only did the rebates reduce CCCSIG s equity by $20M, but there was over $5.0M of additional Interest (assuming an interest rate of 3.5%) that would have been earned over that time (through 2005), which would have increased its equity position. It is obviously not possible to go back, but it is important to understand that had the rebates not been given, CCCSIG not only would have weathered the severe downturn in the WC market without having a deficit, but would have still had close to $15M in Net Assets at the end of This helps illustrate that it was not an operational shortcoming of CCCSIG, or its funding model that created this deficit, which would typically be the case for most insurance organizations.

5 In response to the Net Asset Deficit position that CCCSIG found itself in, CCCSIG s Board of Directors voted to declare a Net Asset Deficit Assessment in March of This began by re-characterizing $2.2M that had been collected in 05/06 for a Rate Stabilization Fund as the 1 st installment of the Assessment. The remaining $7.9M was to be collected over the next 10 years. After collecting an additional $1.6M over the following two years, CCCSIG ended the 07/08 fiscal year with excellent news. Due to very positive results in the March 26, 2008 actuarial study (along with a focus on settling claims for less than the liabilities reserved for those claims) the Board of Directors voted to suspend the Deficit Assessment! Even after removing the remaining $6.3M Assessment Receivable from the books, CCCSIG ended the 2008 fiscal year with $16.3M in Total Net Assets. CCCSIG had some more positive news in the 2009 fiscal year, adding an additional $8.4M in surplus, bringing the Group s Net Assets to $24.7M. This remarkable turn around over a 4-year period provided the Group with a strong level of Net Assets, large enough that the Board of Directors decided to declare a $3.5M rebate in the 2010 fiscal year! Even after providing this rebate to the members, CCCSIG ended the year with $24.6M in Net Assets, due to a surplus for 2009/10 of $3.4M prior to the rebate. With the Net Assets remaining at such a strong level after 09/10, the Executive Committee decided to lower the 10/11 base rate from $2.43 to $1.95, with the intent of returning an additional $4.0M of equity growth/equity to the members. There was an additional lowering of the Net Assets as of 6/30/11 due to the deterioration of the investment market, which necessitated lowering the discounting of claims liabilities by $3.4M (from 4% to 3.13%), which was partially offset by some positive ultimate claims cost development, leaving $17.8M in Net Assets. The Executive Committee decided to lower the base rate again in 11/12, from $2.41 to $1.95, with the intent of returning an additional $3.8M of equity growth/equity to our members during these difficult financial times. The continued poor performance in the investment market resulted in another lowering of the claims liabilities discounting of $1.1M (from 3.13% to 2.89%), but we had some more positive claims results during the year which helped offset these, allowing us to end the year with $14.7M in Net Assets. For 12/13 the Executive Committee decided to start moving the rate back towards the actuarially determined rate, but still wanted to help the members by returning more equity growth/equity. They reduced the base rate from $2.58 to $2.32, returning another $2.1M. The deterioration of the investment market had slowed during this fiscal year, so we only had to lower the discounting of claims liabilities by $98k (from 2.89% to 2.79%). CCCSIG continued to have strong operational results in 12/13, which was evidenced by the equity only being reduced by $21k for the year, when it could have been lowered by as much as $2.2M ($2.1M equity return + $98k discount rate reduction). For 13/14, the Executive Committee chose to set the base rate at the $2.52 rate that was determined by the Actuarial Report. CCCSIG had another strong year, ending with a $3.3M surplus from operations. The investment market stabilized this year, which allowed CCCSIG to keep the discount rate at 2.79%, so we ended the fiscal year with an $18.0M Net Position (Net Assets). For 14/15, the Executive Committee again set the base rate to the rate determined by the Actuarial Report, which was $2.62. The investment market remained stable, maintaining the 2.79% discount rate. CCCSIG had another operational surplus, $2.2M for this fiscal year, which was offset by the requirement of GASB 68 to record the outstanding pension liability through a prior period adjustment. Overall, this resulted in a $200k increase to our Net Position, ending the year with $18.2M in Net Assets. The Executive Committee set the base rate for 15/16 at $2.47, choosing to go half way between last year s rate of $2.62 and the $2.32 rate determined by the actuarial study. This was done to capture some of the indicated positive development, while recognizing that the study was completed by a new actuarial firm, with the thought being that we should give the new firm time to make sure the study is stable. The investment market remained much the same, with some indications of improvement, so CCCSIG has stayed with the 2.79% discount rate. CCCSIG generated an operational surplus in 15/16 of $5.1M, increasing our Net Position to $23.3M. It is important to note that since 09/10, CCCSIG has been able to return $13.4M to our members during these difficult financial times, as well as absorb the effects of the deterioration of the investment market which negatively impacted our equity by $4.8M, and further reducing equity by another $2.0M due to the new requirement to book the pension liability, with our equity ultimately only being reduced by a little less than $1.4M during that time!

6 Premium Formula FY17 Estimated Payroll / 100 X Base Rate X Ex-Mod Factor = FY17 Estimated Premium

7 APPROVED WC PREMIUM $750k Overall Rate of $ PAYMENT SCHEDULE PAYROLL ESTIMATE EX-MOD FACTOR BASE RATE ESTIMATED PREMIUM PREMIUM 1-Jul-16 1-Dec-16 1-Mar-17 Premium Advance DISTRICT $ % 30% 20% Acalanes 35,298, % , , , , ,700 Antioch 103,891, % ,899,840 3,899,840 1,949,920 1,169, ,968 Brentwood 42,450, % , , , , ,666 Byron 9,618, % , , ,063 88,838 59,225 Canyon 431, % ,310 7,310 3,655 2,193 1,462 CCC Office of Ed. 35,267, % ,047,312 1,047, , , ,462 John Swett 9,867, % , ,806 74,403 44,642 29,761 Knightsen 3,360, % ,417 54,417 27,209 16,325 10,883 Lafayette 24,000, % , , , ,953 85,301 Liberty 44,472, % ,285,561 1,285, , , ,112 Martinez 25,184, % , , , ,651 92,434 Moraga 12,538, % , , ,904 64,142 42,762 Oakley 30,016, % , , , , ,729 Orinda 19,025, % , , , ,370 66,913 Pittsburg 56,201, % ,464,263 1,464, , , ,852 Walnut Creek 21,472, % , , , ,320 86,880 COE Total $473,097,563 $12,130,569 $12,130,569 $6,065,288 $3,639,171 $2,426,110 CCC College 118,000, % ,513,893 1,513, , , ,778 San Ramon 196,619, % ,453,107 3,453,107 1,726,554 1,035, ,621 West Contra Costa 198,692, % ,803,582 5,803,582 2,901,791 1,741,075 1,160,716 TOTAL $986,409,799 $22,901,151 $22,901,151 $11,450,580 $6,870,346 $4,580,225

8 PR PR % PR % PR % DISTRICT Actual Actual CHANGE Actual CHANGE ESTIMATE * CHANGE Acalanes Antioch Brentwood Byron Canyon CCC College CCC Office of Education John Swett Knightsen Lafayette Liberty Martinez Moraga Oakley Orinda Pittsburg San Ramon Valley Walnut Creek West Contra Costa TOTALS 34,312,345 34,424, % 36,454, % 35,298, % 86,354,328 88,952, % 95,913, % 103,891, % 39,475,232 41,140, % 45,349, % 42,450, % 7,145,829 8,979, % 9,814, % 9,618, % 377, , % 380, % 431, % 117,908, ,046, % 117,681, % 118,000, % 30,344,120 30,909, % 31,780, % 35,267, % 7,329,207 8,096, % 9,178, % 9,867, % 2,273,422 2,439, % 2,692, % 3,360, % 17,694,121 18,928, % 19,443, % 24,000, % 33,208,396 36,637, % 39,455, % 44,472, % 19,927,256 22,042, % 24,026, % 25,184, % 9,572,294 10,665, % 10,977, % 12,538, % 22,060,109 24,974, % 26,291, % 30,016, % 14,567,999 15,390, % 16,040, % 19,025, % 49,444,348 56,192, % 62,799, % 56,201, % 173,727, ,444, % 177,932, % 196,619, % 17,484,617 17,033, % 19,656, % 21,472, % 163,943, ,410, % 157,874, % 198,692, % $ 847,151,941 $ 844,111, % $ 903,742, % $ 986,409, %

9 DISTRICT EX-MOD EX-MOD % CHANGE Acalanes 76.3% 68.2% -10.6% Antioch 163.7% 161.8% -1.2% Brentwood 87.6% 90.2% 3.0% Byron 105.9% 132.7% 25.3% Canyon 75.7% 73.1% -3.4% CCC College 57.1% 55.3% -3.2% CCC Office of Education 119.9% 128.0% 6.8% John Swett 85.1% 65.0% -23.6% Knightsen 73.0% 69.8% -4.4% Lafayette 81.2% 76.6% -5.7% Liberty 133.7% 124.6% -6.8% Martinez 72.1% 79.1% 9.7% Moraga 91.3% 73.5% -19.5% Oakley 119.9% 87.4% -27.1% Orinda 78.5% 75.8% -3.4% Pittsburg 138.8% 112.3% -19.1% San Ramon Valley 72.3% 75.7% 4.7% Walnut Creek 81.8% 87.2% 6.6% West Contra Costa 116.8% 125.9% 7.8%

10 Millions Selected CCCSIG Historical Financial Data Analysis of Audited Statements of Net Assets $125 $105 $85 $65 $45 $25 $5 $(15) * 2006* 2007* Total Assets Total Liabilities Net Assets CCCSIG adopted the Self-Insured Plans reserving policy in 2005, which resulted in a large increase in reserves, but were not adjusted for in the Actuarial Study until 2008.

11 Millions Selected CCCSIG Historical Financial Data Analysis of Audited Statements of Activity(WC Only) $45 $35 $25 $15 $5 $(5) $(15) *2011 *2012 * Revenues Expenses Rebates Annual Surplus/(Deficit) *Equity Growth/Equity was used during these years to lower the premiums for members.

12 Fiscal Year Budget WC HB TOTAL Contributions $22,901,151 $18,450,000 $41,351,151 Miscellaneous 359,500 7, ,000 Total Income $23,260,651 $18,457,500 $41,718,151 Claims and Operating $21,219,755 $18,450,000 $39,669,755 Salaries and Benefits 3,251, ,251,176 Other Administrative 844, ,251 H&S Incentive Rebate 165, ,000 Total Expense $25,480,182 $18,450,000 $43,930,182 Net Asset Increase (Decrease) -2,219,531* 7,500-2,212,031 *Estimated use of Equity Growth/Equity to reduce premiums.

13 Fiscal Year Budget WC PROGRAM INCOME WC PROGRAM EXPENSES WC Premiums 98.5% Claims Costs 76.9% Miscellaneous Income 1.5% Admin Dept BR Dept 7.3% 1.1% General Dept 1.4% H&S Dept 2.7% Claims Dept 10.7%

14 CCCSIG Rates & Equity History One of the main benefits of a JPA versus a commercial insurer is that if the cost of a policy year turns out to be less than the amount of premiums that were paid in, the additional funds remain with the JPA and can be used to benefit the members. This can be done through rebates, lowering rates for future policy years, or building up equity to be used by the members in the future. A commercial insurer will use these additional funds to increase their profit. CCCSIG has been able to do all three of these things over the years, with the rebates and rate reductions having a direct effect of lowering the amount of premiums the members ultimately pay in. For example, CCCSIG has provided rebates to our members totaling $23.5M since 1997 and has returned an additional $9.9M in equity from lowering the base rate (with another $2.2M being returned in ). If you look at all of the premiums our members have paid in since the inception of CCCSIG in 1977, the return of these funds result in an average decrease of 7.0% in their workers compensation insurance costs. Even after returning the $33.4M to our members, CCCSIG ended fiscal year 2016 with equity of $23.3M. While it is important for the Group to maintain equity to be able to weather any negative market developments or cost increases, this equity ultimately belongs to our members and can be used to help them in the future as they see fit. The chart below shows a nine-year history of the rates determined by the Actuarial Study at the 80% confidence level, the rate that was adopted by CCCSIG, the estimated amount of equity growth/equity that was used to reduce the premiums paid in by the members, the rebate that was distributed to the members, and the change in the equity balance over that time period. If you look at the beginning and ending equity balance, you ll see that equity has only gone down by just under $1.4M during this time, while almost $13.4M was returned to our members (with an additional $2.2M expected to be returned in ). Also within this period, the deterioration of the investment market has resulted in CCCSIG having to reduce the discount rate for our claims liabilities (discounting recognizes that the premiums that were collected but haven t been paid towards expenses yet are earning interest), which resulted in raising the net claims liabilities(reducing equity) by almost $4.8M. In , GASB 68 required us to book our pension liability as a prior period adjustment of just under $2.0M. So between returning equity to our members, lowering of the discount rate, and recording the pension liability, equity could have been lowered by as much as $20.2M, instead of the $1.4M that it was actually lowered, which reflects some very strong operational results. CCCSIG 9-Year Rate History 80% CL Policy Actuarial Adopted Est. Equity Growth/ Ending Equity Year Rate Rate Equity Used Rebate Balance $ 2.52 $ 2.52 $ - $ - $ 24,659, $ 2.39 $ 2.39 $ - $ 3,500,000 $ 24,577, $ 2.43 $ 1.95 $ 3,992,096 $ - $ 17,786, $ 2.41 $ 1.95 $ 3,761,279 $ - $ 14,681, $ 2.58 $ 2.32 $ 2,116,797 $ - $ 14,660, $ 2.52 $ 2.52 $ - $ - $ 17,959, $ 2.62 $ 2.62 $ - $ - $ 18,160, $ 2.32 $ 2.47 $ - $ - $ 23,292, $ 2.54 $ 2.32 $ 2,219,531 $ - Total $ 12,089,703 $ 3,500,000

15 CONTRA COSTA COUNTY SCHOOLS INSURANCE GROUP STATEMENT OF NET POSITION JUNE 30, 2016 AND ASSETS Current Assets Cash and cash equivalents $ 12,642,994 $ 18,696,363 Investments maturing within one year 8,365,270 5,660,565 Interest receivable 265, ,830 Accounts receivable 1,480, ,710 Prepaid expenses 1,131, ,684 Total Current Assets 23,885,576 25,243,152 Noncurrent Assets Investments, less portion maturing within one year 78,058,964 74,537,845 Capital assets, net 3,855,533 4,007,909 Total Noncurrent Assets 81,914,497 78,545,754 Total Assets 105,800, ,788,906 DEFERRED OUTFLOWS OF RESOURCE Deferred outflow on pensions 2,414, ,213 LIABILITIES Current Liabilities Accounts payable 1,565,552 2,721,615 Accrued expenses 106, ,110 Current portion of assessment payable 347, ,071 Current portion of unpaid claims and claim adjustment expenses 13,000,000 12,500,000 Total Current Liabilities 15,019,325 15,674,796 Noncurrent Liabilities Unpaid claims and claim adjustment expenses 65,680,817 65,564,805 Pension liability 1,823,648 1,804,525 Assessment payable 2,100,531 2,430,943 Total Noncurrent Liabilities 69,604,996 69,800,273 Total Liabilities 84,624,321 85,475,069 DEFERRED INFLOWS OF RESOURCE Deferred inflow on pensions 298, ,788 NET POSITION Net investment in capital assets 3,855,533 4,007,909 Unrestricted 19,436,496 14,152,353 Total Net Position $ 23,292,029 $ 18,160,262 The accompanying notes are an integral part of these financial statements. 10

16 CONTRA COSTA COUNTY SCHOOLS INSURANCE GROUP STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN NET POSITION FOR THE FISCAL YEARS ENDED JUNE 30, 2016 AND OPERATING REVENUES Member contributions $ 43,367,671 $ 45,854,971 Other revenues 237, ,068 Total Operating Revenues 43,605,104 46,127,039 OPERATING EXPENSES Provision for claims and claims adjustment expenses 14,170,456 15,531,893 Insurance premiums 21,879,688 24,655,803 Program salaries and benefits 2,491,544 3,184,236 Professional and consulting fees 185, ,891 Depreciation expense 202, ,565 Other general and administrative expenses 1,015, ,014 Total Operating Expenses 39,945,013 44,702,402 Operating Income (Loss) 3,660,091 1,424,637 NONOPERATING REVENUES Investment income 1,471, ,321 Change in Net Position 5,131,767 2,186,958 Net Position Beginning of Period - As Originally Reported $ 18,160,262 17,959,611 Prior period adjustment (1,986,307) Beginning of Period - Restated 15,973,304 End of Period $ 23,292,029 $ 18,160,262 The accompanying notes are an integral part of these financial statements. 11

17 WORKERS COMPENSATION 2015/16 Workers Compensation Overview There are always multiple issues on the table in the Workers' Compensation arena, that fight simultaneously to be heard, gain speed and prevail as policy, procedure or law. Selected from a very long list, are three very important issues trending at this time. 1. The Center for Medicare and Medicaid Services is moving aggressively to finalize measures, which would protect their interest if they are presented with a request to pay for medical expenses that are associated with a medical condition that has been deemed to be the responsibility of another entity. These measures require that the interests of the Centers for Medicare and Medicaid be considered prior to entering into any agreement or settlement that seeks to relieve the responsible party of providing continuing medical care for that medical condition. This includes work-related injuries. 2. Telemedicine is fast becoming an effective avenue for medical providers to deliver medical treatment in healthcare and is now being considered for employees who become injured on the job. Telemedicine involves the provision of health care through interactive audio, video or data, rather than in person, providing immediate access to a medical doctor 24/7 and 365 days a year. Talk about real time medical care, this is the way to go! Of course there will be a small percentage of the more serious injuries that would not benefit from this type of medical service. However, the benefits that can come from availing this option to the larger percentage of employees is a step in the right direction. CCCSIG is in the process of evaluating the benefits that would come from integrating this secondary medical component into our current program with Company Nurse. 3. Lawmakers are now paying serious attention to the issues surrounding Psychological Conditions Pre and Post Industrial Injury. Psychological factors can be a part of what happens to some people who have workers' compensation injuries. However, some studies show that injured workers had a higher rate of psychological conditions before their injury than the general population. Therefore, because this condition, more times than not complicates recovery, identifying psych conditions early in a claim is important and is an area where early triage and nurse case managers can help. Based on these important factors, lawmakers are working to put guidelines in place to help lower workers' compensation costs by addressing as soon as possible, what some medical evaluators have now termed "Chronic Pain of the Brain." All issues as noted above require guidelines in place to ensure consistency throughout the Workers Compensation Industry. CCCSIG continues to monitor future development of these issues and will incorporate them as a part of our practices and procedures for claims administration. California's state average weekly wage (SAWW) rose 3.9% during the last 12 months ending in March This triggered an increase from the current 2016 workers compensation average weekly minimum/maximum rates of $ and $1,128.43, to the minimum/maximum rates of $ and $1,172.52, for all dates of injury on or after 1/1/2017.

18 WORKERS COMPENSATION ESTIMATED COUNTYWIDE SAVINGS IN 2015/16 UTILIZATION REVIEW $252,938 EARLY RETURN-TO-WORK $1,252,122 BILL REVIEW $257,244 PHARMACY BENEFIT MANAGEMENT $93,512 FUTURE MEDICAL/ COMPROMISE & RELEASE CLAIM SETTLEMENTS $680,661 COMBINED TOTAL $2,536,477 COMPANY NURSE 41% (Calls with no Medical) The Claims Department had an Independent Claims Audit which occurs every two years as a standard best practice and is also a requirement for California Association Joint Powers Authority (CAJPA) to maintain Accreditation for Excellence. The audit took place this year and involved review of 100 claim files with dates of injury occurring over the last three years. This audit resulted in the department receiving top scores of "A" or "A+ in 13 of the 15 overall audit areas and a score of "B" in the remaining two categories. The auditor noted that "CCCSIG achieved excellent scores due to the intelligent systems in place, smart organizational structure, as well as staffing the claims department with experienced professionals." Did You Know? All CCCSIG Examiners have California Self Insurance Administrator Certificates. Having this Certificate holds them in high esteem in the workers compensation industry. Each Claims Department Staff Member has between years experience in Workers' Compensation Claims Administration. We are now preparing for our 2017 Claims Coordinator Meeting. We encourage all districts to attend. Information relating to this spectacular event will be provided at a later date.

19 HEALTH & SAFETY SERVICES Mission of the Health & Safety Services Department To provide districts with a variety of services driven by identified trends and district feedback that will assist in reducing the frequency of employee injuries and enhancing the overall health of the workforce. Top 3 Occupations Countywide All Reported Incidents by Claim Type, Average Cost per Claim & Total Incurred Top 3 Incident Types Countywide All Reported Incidents by Claim Type, Average Cost per Claim & Total Incurred Overview of Core Health & Safety Services Overall Participation: 18 districts; 1,548 services; 17,000 employees Post Offer, Pre-Placement Evaluation Program (PEP) 16 districts; 9,200 applicants; 7% Fail; 1% Medical Clearance Purpose: To determine if new hires in the occupations listed below possess the minimum level of strength necessary to perform the essential physical tasks of the job. Occupations: Custodians, Food Service Workers, Special Education Instructional Assistants, Building & Grounds Maintenance Workers, Delivery Drivers, Warehouse Workers and Bus Drivers. Health & Safety Trainings (In-Person Trainings) ANNUAL HEALTH & SAFETY SUMMER TRAINING 18 districts; 943 employees; 28 programs; 274 Blood Pressure Screenings (14% Normal; 36% High Normal; 34% High; 16% Very High) Purpose: To provide interactive, job-specific safety, wellness and CalOSHA trainings that teach new skills, reinforce existing knowledge and motivate employees to make sound safety/health decisions on the job and at home. Occupations: Custodians/Building & Grounds Maintenance Topics: Job-Specific Back Injury Prevention, Bloodborne Pathogens, Heat Illness, Hazard Communication and IIPP Refresher and Managing/Lowering Blood Pressure. Average Overall Evaluation Rating: 4.9 out of 5 (1=Poor; 5=Excellent) CPI NONVIOLENT CRISIS INTERVENTION TRAINING 14 districts; 419 employees; 30 trainings (16 full trainings/14 refresher trainings) Purpose: To provide opportunities for discussing and practicing key concepts while learning proven, practical skills to de-escalate disruptive or assaultive students. Occupations: Administrators, Campus Supervisors, Instructional Assistants, Psychologists and Transportation Staff. Average Overall Evaluation Rating: 4.8 out of 5 (1=Poor; 5=Excellent)

20 HEALTH & SAFETY SERVICES Health & Safety Trainings (Online Trainings) ONLINE TRAINING (TARGET SOLUTIONS) 6 districts; 4,422 employees; Top 3 courses: Mandated Reporter, Slip/Trip/Fall and Sexual Harassment Prevention ON-DEMAND ONLINE VIDEO TRAININGS (BY CCCSIG) 16 districts; 8,019 views; Top 3 videos: Slip/Trip/Fall Prevention, H&S Services Overview for Administrators and Heat Illness Purpose: To provide additional training options that complement our in-person trainings and assist districts in reaching a greater number of employees with important health, safety and HR-related information. Note: CCCSIG discontinued using Target Solutions at the end of FY 2015/16. All Target Solutions training records created in FY 2015/16 were ed to each district in Excel format in mid-july. CCCCSIG will be exploring different programs for enhancing our On Demand H&S Video Program in FY 2016/17. NEW IN 2016/17 Administrator Health & Safety Briefs at Staff Meetings Fall Energize Your Workday Online Wellness Challenge Winter & Spring Fitness/Wellness Challenges Adopting Mindfulness as a Lifestyle Choice, Kick Start Your Health, High Blood Pressure: Awareness, Management & Prevention and Conflict Theater (In-Person Trainings) Ergonomic Evaluations 14 districts; 253 ergonomic evaluations Purpose: To identify risk factors that may lead to musculoskeletal disorders (MSDs), determine any feasible engineering or administrative control measures to reduce or prevent employee exposure to MSDs and identify appropriate types of personal protective equipment where effective engineering controls are not feasible. Occupations: Office/Clerical/Administrative, Teachers, Maintenance & Operations, Grounds and Food Service Outcomes: Of the 82% who completed a 30-day follow up, 76% improved, 23% stayed the same and 1% worsened. Healthy Lifestyle Programs 18 districts; 1,220 participants (814 online/406 poster) Programs: Let s Walk to Tahoe, Healthy Holidays & Spring Into Shape Purpose: To motivate employees to increase and/or maintain their current level of fitness, eat healthier and/or improve health and safety behaviors. Occupations: Office/Clerical, Teachers/Faculty, Maintenance & Operations, Custodians, Instructional Assistants & Administrators Outcomes: 80% of those who completed evaluations now pay more attention to their physical activity and well-being and 93% would like the programs to continue being offered. Annual Student Poster Contest Results 2 districts (Byron USD & WCCUSD); 23 poster entries Purpose: To raise awareness of the high frequency and severity of slip, trip, fall incidents countywide. 1st place winners received $100, a framed poster and certificate; 2nd place winners received $50. Districts were given the opportunity to order copies of the winning posters to hang at each school/site. First Place: Tori Violich Second Place: Long Nguyen Both 1st and 2nd place winners were 7th graders in Ms. Long s class at Excelsior Middle School/Byron USD District Health & Safety Incentive Program 18 districts (Brentwood, Byron, COE & WCCUSD completed 100%) Purpose: To assist districts in building/maintaining a health and safety culture, mitigating high risk trends and maintaining CalOSHA compliancy. Participating districts may receive up to 1% of their premium back to apply toward their employee health and safety programs. CPI Instructor Certification Training at CCCSIG 4 districts; 14 attendees Purpose: To assist member districts in certifying select district individuals as CPI instructors which serves to further mitigate the increase in employee incidents involving student behaviors. Countywide H&S Coordinator Meetings October 2015 (featuring the Injury & Illness Prevention Program (IIPP) with Rick Ullerich, CalOSHA Consultant): 17 districts; 22 attendees; 14 attendees January 2016 (Webinar featuring Online Training Basics with Ashley Marinello, Target Solutions): 17 districts; 25 attendees April 2016 (featuring Slip, Trip, Fall Site Inspections with Steve Webber, CCCSIG): 18 districts; 26 attendees Purpose: To provide Health & Safety Coordinators with networking opportunities and pertinent health and safety information and resources that they can promote and implement within their respective districts.

21 CCCSIG New Health & Safety Programs (2016/17) HEALTHY LIFESTYLE PROGRAMS The purpose of CCCSIG s Healthy Lifestyle Programs are to motivate employees to increase and/or maintain their current level of fitness, eat healthier and/or improve other health and safety behaviors. Fall Program: Energize Your Work Day Fitness Challenge, a 6-week online wellness challenge that incentivized participants to complete and log at least 50 healthy activities by the end of the program. Those who met the program goal were entered into a countywide drawing for a $50 REI gift card. Examples of healthy activities: walking, playing sports, stretching, eating a healthy meal, skipping sweets for a day, 7-8 hours of sleep, drinking 8 glasses of water/day, 5-9 servings of fruits/veggies/day, eating breakfast within 2 hours of rising, etc. The district with the highest average number of healthy activities logged won the CCCSIG Perpetual Fitness/Wellness Challenge. This challenge was part of a year-round, online wellness program that allows employees to continue tracking healthy activity between challenges and year-round; receive health tips, recipes and other wellness-related information; and cheer on their colleagues. Spring Program: To Be Announced CCCSIG HEALTH & SAFETY TRAININGS (In-Person) All of our in-person trainings can be customized to district and occupation-specific needs. We can also create new health and safety trainings by request with ample advance notice. Adopting Mindfulness as a Lifestyle Choice The purpose of this training is to help participants manage stress, improve focus and create more happiness in life! In this 1-2 hour training, we define Mindfulness, review the benefits of practicing mindfulness and unplugging from technology, try different Mindfulness activities/techniques, such as creative visualization/guided imagery, progressive muscular relaxation and meditation. Conflict Theater At the heart of any good story is conflict, a problem to be solved or dispute to be settled. In this session we look at examples of conflict in film as a starting point to discuss ways to better manage conflict. In this 1-2 hour training we explore how to better identify the needs of all parties with conflict mapping, and how to better communicate those needs in an effort to achieve a mutually beneficial resolution. High Blood Pressure: Awareness, Management & Prevention 1 in 3 Americans have high blood pressure; and awareness and management of this disease remains suboptimal. Participants will learn the causes, effects on the body and what they can do to prevent high blood pressure. Optional blood pressure screenings provided at the end of the session. CCCSIG 5-MINUTE HEALTH AND SAFETY BRIEFS FOR STAFF MEETINGS These 5-minute Safety Briefs were created for administrators, custodial and maintenance managers to present to their employees at staff meetings throughout the year in order to assist in preventing injuries and demonstrate district support for employee health and safety in the workplace. To access the PDFs, please visit

22 CCCSIG 2015/16 Health Benefit Program Highlights PLAN YEAR 2017 RATES AND INSURANCE CARRIER CHANGES As the Health Benefits Program enters its 13 th program year, there is a change in the non-kaiser healthcare insurance provider due to Anthem Blue Cross declining to issue a renewal quote for participating members for Effective January 1, 2017, together with Kaiser Permanente, the Health Benefit Program member districts will be offering Sutter Health Plus healthcare plans. With Sutter Health, the plan renewal rates for 2017 are significantly better than those provided by Anthem Blue Cross for Kaiser s renewal rate for 2017 decreased by 1.07% from the 2016 plan year. Sutter Health Plus HMO Plans on average represents a reduction in the rates of 27.2% to 50.42% when compared to Anthem Blue Cross for Both Travis Unified School District (effective July 1, 2016) and Arcohe Union School District (effective October 1, 2016) joined the Health Benefits Program to participate in the Kaiser plan. EDUCATION, WELLNESS AND PREVENTION EFFORTS Health education, wellness and prevention outreach continues to be a focus for the Health Benefits Program for member districts as noted below: CCCSIG Monthly Harmony for Health, e-communication that includes education and prevention information is provided to district coordinators to share with employees. Periodically, posters and flyers from the healthcare plan providers are also provided to district coordinators to post and share with employees. These communications promote the healthcare providers services, which are included in the health plans offered to employees. Annual Fall Flu Vaccination Clinics available during open enrollment offer free on-site flu shots sponsored by the Health Benefits Program for employees who elect coverage through one of the participating member districts health plans. CCCSIG Health and Safety Services Fall Wellness Activities for Contra Costa County Workers Compensation Member Districts is offered online county-wide. This year s program is Energize Your Workday, which has member districts competing for the CCCSIG Perpetual Fitness/Wellness Challenge Trophy! LEGISLATIVE UPDATE Throughout the year, as part of the Health Benefits Program monthly meetings, the Committee receives information on various changes in the healthcare arena, State and Federal legislation and webinars. These updates are also provided electronically by CCCSIG s Health Benefits Broker, Debra De Spain, with Keenan and Associates.

23 CCCSIG Employee Assistance Program through MHN CCCSIG, in partnership with Schools Insurance Authority, offers its member districts an Employee Assistance Program through MHN. Effective July 1, 2016 the rate is $1.70 per employee per month (rate is guaranteed for three years). MEMBER DISTRICTS Acalanes Union High SD CCC Office of Education Moraga SD Orinda Union SD Pittsburg USD West Contra Costa USD BENEFITS OF AN EAP THROUGH MHN Some of the quality and valued core EAP services include: Clinical support that can be delivered face-to-face, over the phone or even via web-video technology Expert work & life services including legal consultations, financial counseling, identify theft assistance, and more A secure member website with useful self-help programs, tools, and information Great client services, including management consultations, job performance referrals, and critical incident stress management in the event of traumatic incidents at the workplace Some of the EAP resources most commonly utilized and valued by CCCSIG members since July 2011 have been: #1 utilized service: Legal Consultations Clinical coaching and support Financial Counseling Organizational services including 1 critical incident response If you are interested in additional information, have questions or if you would like a MHN representative to provide a presentation at your district on the benefits of the EAP, please contact Erica Williamson, HR/Communications Manager at ewilliamson@cccsig.org.

24 HISTORY OF CCCSIG CCCSIG History The Contra Costa County Schools Insurance Group (Agency) is a Joint Powers Authority organized in 1977 for the purposes of self-insuring workers compensation and provision of health & safety services to its 20 member public school districts in Contra Costa County. Today, it is a self-insured, self-administered public agency, which is one of the largest of its kind in the State of California. Of the 23 member districts, 21 are K-12 school districts, one County Office of Education and one Community College District. The Agency s workers compensation program encompasses greater than 22,000 employees and more than $903 million in payroll, which translates to approximately $22 million in workers compensation premium. Of the 23 member districts in the JPA, effective January 1, 2016, 9 are also members of the insured Health Benefits Program. The Agency has been recognized for success in leadership by its peers. First accredited by the California Association of Joint Powers Authorities (CAJPA) in 1993, the Agency currently is Accredited with Excellence. Due to the success of the program since it became self-administered in 1995, the member Superintendents and Governing School Boards supported and implemented changes to the JPA Agreement in 2003 to incorporate the potential for provision of other areas of insurance coverages, the first of which was the Health Benefits Program. CCCSIG continues to look into other avenues and potential areas of coverage to best serve the member s interests. CCCSIG is committed to customer service, education, prevention and cost containment services for its member districts. Some of the programs implemented by CCCSIG that have assisted in decreasing the cost and number of workers compensation claims are a structured early return-to-work program; a post offer, pre-employment strength testing program; in-house bill review; an in-house nurse; Company Nurse new claims reporting; ; wellness, health and safety services, which include ergonomic evaluations, in-person and video trainings and presentations in all areas of health, wellness and safety; as well as many other resources. CCCSIG was recognized in 2005 by the State of California with a Fit Business Award, which was presented in an awards ceremony to CCCSIG by Senator Tom Torlakson, who was also the Chairperson for the California Task Force on Youth and Workplace Wellness. CCCSIG was recognized in the small business category, for being on the forefront of providing employees a worksite environment that supports healthy choices, as well as recognizing the many programs and procedures that CCCSIG has in place for overall employee wellness. CCCSIG s overall culture of employee health, wellness and safety carries over to its member districts in our commitment to caring for, empowering and supporting all employees of its member districts to keep them safe, healthy and productive through excellence in programs, leadership and administration and striving towards a safe and healthy school workplace. CCCSIG Historical Tidbits California authorized the formation of Joint Powers Authorities (JPAs) in the mid-70 s in response to the hard insurance market, during which time Contra Costa County districts either couldn t find workers compensation insurance or were charged exorbitant rates for it. In 1977 Contra Costa County school districts formed CCCSIG, which is self-insured (fully governed and owned by the members) to provide affordable and stable rates for workers compensation. In 1995, CCCSIG moved from third party administration to self-administration for workers compensation, which improved outcomes for districts and services for employees through claims administration and health and safety services, and eliminated involvement by a for-profit administrator.

25 TOGETHER EVERYONE ACHIEVES MORE On March 24, 2016, Consultant Roberta McCreary facilitated a Strategic Planning Retreat with CCCSIG s Board of Directors and Managers at CCCSIG's office. During this retreat, the Group did a SWOT (Strengths, Weaknesses, Opportunities and Threats) Analysis, and reviewed the current Vision and Mission Statements and Core Values. As a result, on August 25, 2016, CCCSIG's Executive Committee adopted new Vision/Mission Statements and Strategic Priorities. Vision Statement: Our vision is a safe and healthy school workplace. Mission Statement: CCCSIG cares for, empowers and supports all employees of its member districts to keep them safe, healthy and productive through excellence in programs, leadership and administration. Strategic Priorities (1-3 Years): Maintain Financial Stability Continued Education about CCCSIG Increase District Participation and Responsibility Workers Compensation/Health & Safety Services Outreach Leverage CCCSIG Assets and Administrative Structure Monitor Legislative/Regulatory Developments and Create Strategy if Needed Maintain and Celebrate CCCSIG s Positive Work Environment CCCSIG s Board of Directors CCCSIG s Board of Directors includes one representative from each district to serve the needs of all members. Nine members of the Board serve as the Executive Committee*. CCCSIG Board of Directors (as of 10/16): *Sheri Gamba, President/West Contra Costa USD *Norma Gonzales, Vice-President/Pittsburg USD *Bill Clark, Secretary/CCC Office of Education *Julie Bautista, Acalanes Union High SD *Jessica Romeo, Antioch USD *Eugene Huff, CCC College District *Lenee Cadotte, Lafayette SD *Diane Deshler, Martinez USD *Daniela Parasidis, Moraga SD Roxane Jablonski-Liu, Brentwood Union SD Lisa Williams, Byron Union SD Gloria Faircloth, Canyon SD Derek Pinto, John Swett USD Cindy Friedmann, Knightsen Elementary SD Liz Robbins, Liberty Union High SD Cindy Peterson, Oakley Union Elementary SD Teresa Sidrian, Orinda Union SD Keith Rogenski, San Ramon Valley USD Audrey Katzman, Walnut Creek SD Jim Shock, Acohe Union SD Candi Clark, Ed. D., Castro Valley USD Deborah Cooksey, Mt. Diablo USD Jamie Metcalf, Travis USD CCCSIG s CORE VALUES: COMMITMENT to proactively evaluate opportunities to enhance services and programs offered to benefit school district employees while lowering workers compensation costs. FLEXIBILITY through the exchange of ideas adapt to new situations and change to achieve success in our programs and enhance what we are today and into the future. TEAMWORK working together as one, collaborating with member districts focused on a common purpose to achieve excellence. QUALITY a characteristic defining what we continuously strive to achieve, representing the highest standards in our field and our individual areas of expertise, devoted to our purpose and foundation. CCCSIG Staff CCCSIG s staff is experienced and dedicated to providing excellent customer service to member districts and their employees. CCCSIG s staff as of 10/16: