Superiors’ Workman Comp Plan Spends Money To Save Money Next Year
A change to the way that the City of Superior manages and insures against workman comp claims will put the government body in the position of spending money to eventually save money. It'll also have the city entering an agreement with the company it was planning to eventually do away with.
The city has already made plans to sever the ongoing insurance relationship its had with Cities and Villages Mutual in favor of self-funding the benefit. According to details shared in an article in the Superior Telegram [paywall], the savings by doing so will be quite significant. "The city anticipates saving about $100,000 by self-funding its worker's compensation expenses and will save about $165,950 next year after changing its insurer from Cities and Villages Mutual Insurance Company to Community Insurance Company and Marsh McLellan Agency".
But when they sever the ties to Cities and Villages Mutual, the City of Superior will no longer have access to a piece of software it uses for other purposes. That software - NEOGOV - is used by Superior "to manage new employees through the employment process and train existing employees".
Under the old agreement, access to that software was free. Once the city is no longer a client of Cities and Villages Mutual, they'll have to pay if they want to continue using it.
That poses a problem.
While the city has searched for alternatives, there haven't been many takers. City of Superior Human Resources Director Cammi Janigo detailed how she has requested bids from other companies, but "she only heard back from one company that would require the city to use its financial software in addition to its human resources software"; and that fee clocks in at $31,000 annually.
Meanwhile, Cities and Villages will contract with the city to provide that access to NEOGOV - with a cheaper rate at first; however the dollar amount goes up significantly, when you include the multi-year commitment that Superior City Councilor Jack Sweeney terms a "unique pricing system".
The Superior Telegram shares the total cost of the three-year required commitment by Cities and Villages Mutual:
"Over the three year period, the city anticipates spending about $65,194 to access NEOGOV. Prices quoted start as $12,418 in 2023 (the first year), but rise to $21,731 in 2024 (the second year) and about $31,045 in 2025 (the third year). A one-year option for 2023 alone was quoted at $24,836..."
Mayor Jim Paine suggests that the city knew that this sort of problem would arise with the insurance decision: incurring immediate costs (which might be more than what they were spending) in order to achieve long-term cost savings.
For the time being, it looks like the city will continue to maintain a relationship with Cities and Village Mutual - at least for the software access; they approved the three-year agreement, which will "give....the city time to explore its options".