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A Resolution Approving a Service Agreement with Lodestar Claims & Risk Services, Inc. to Provide Third Party Administrator (TPA) Services for the Village’s Workers Compensation Program for a Five-Year Period and Authorizing Its Execution
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Introduction
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This is an agreement for the administration of the Village’s worker’s compensation program, which is funded through the Village’s Self-Insured Retention Fund. Lodestar was the sole respondent to a Request for Proposals the Village issued on May 22, 2026.
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Recommended Action
Adopt the Resolution.
Prior Board Action
The Board has taken the following prior action(s):
• On July 31, 2023, the Board approved RES 23-231, a Service Agreement with PMA Management Corp. to provide TPA services for the Village’s Workers Compensation Program for a Three Year Period.
• On July 20, 2020, the Board approved RES 20-179, a renewal of a Service Agreement with PMA Management Corp. to provide TPA services for the Village’s Workers Compensation Program for a Three Year Period.
• On June 19, 2017, the Board approved RES 17-575, a Service Agreement with PMA Management Corp. to provide TPA services for the Village’s Workers Compensation Program for a Three Year Period.
Background
The Village utilizes a Third Party Administrator (TPA) to administer the Village’s self-funded workers' compensation program. This includes investigating and administering workers compensation claims, determining compensability and coordinating claim resolution, managing medical treatment and assisting with return-to-work efforts, assigning and coordinating with nurse case managers, medical providers and defense counsel, processing payments, ensuring compliance with applicable workers’ compensation laws and reporting requirements, negotiating settlements and facilitating claim closure, providing claim analytics, financial reporting and reserve recommendations, and advising on claim trends and opportunities to reduce costs and improve outcomes.
Since 2017, the Village has utilized the services of PMA Management Corp.to improve claims administration. In 2026, PMA Management Corp. rebranded and updated their name to Lodestar Claims & Risk Services, Inc. Lodestar was the sole respondent to the Village’s RFP for Third Party Administrator Services which was issued on May 22, 2026. Following our evaluation of the response, the Village determined that Lodestar demonstrated the qualifications and experience necessary to provide the requested services. Additionally, staff have been satisfied with Lodestar’s level of service, responsiveness and competitive pricing, and believe continuing the relationship is in the Village’s best interest.
Timing Considerations
The current agreement with PMA expires on July 31, 2026.
Financial Impact
The Village utilizes its Self Insured Retention Fund (6026) to fund liability judgements and settlements, workers compensation settlements, payments, attorneys’ fees, and related costs necessary to the defense of those cases. Payment to the TPA is funded through the External Support Account 6026.41071.101.530667.0000. Annual administration is based on a per-claim estimate of approximately $28,544 in contract years 1, 2 and 3, and $29,936 in contract years 4 and 5. Additional costs are dependent on other services and settlements pursuant to on-the-job injuries.
Operations Impact
There is no operating impact associated with this item. The item aligns with core service delivery.
DEI Impact
There is no DEI impact associated with this item.
Community Input
There has been no community input given in relation to this item.
Staff Recommendation
Adopt the Resolution
Advantages:
• Provides a continuation of high-quality TPA services with current provider, avoiding disruption to the workers compensation program.
Disadvantages:
• As the sole respondent to the Village’s RFP, it is possible there is an alternative that could be more cost effective.
Alternatives
Alternative 1:
Delay adoption, and re-issue the RFP, seeking additional respondents
Advantages:
• The Village may have an improved understanding of the current market for a TPA for the Village’s workers compensation program.
Disadvantages:
• Delays administration of current claims program.
Anticipated Future Actions
There are no anticipated future actions in relation to this item.
Prepared By: Kira Tchang, Assistant Village Manager/HR Director
Reviewed By: Click here to enter text. [Dept. Director Name, Title]
Approved By: Kevin J. Jackson, Village Manager
Attachment(s):
1. Resolution
2. Agreement
3. Lodestar Proposal
4. Request for Proposals