Title
Adopt a Resolution to Approve and Authorize the City Manager to Execute a Consulting Services Agreement with Intercare Holdings Insurance Services, Inc. for Workers’ Compensation Third Party Claims Administration Services for a Three-Year Term in the Amount Not to Exceed $587,355 with an Option to Extend for Two Additional One-Year Terms in the Amount Not to Exceed $425,381 if the Two Additional One-Year Extensions are Exercised by the City
Staffreport
COUNCIL PRIORITY
• Infrastructure
SUMMARY
The City of San Leandro currently contracts with Intercare Holdings Insurance Services (“Intercare”) for administration of the City’s self-insured workers’ compensation program. The current agreement is set to expire on June 30, 2026. Following a competitive Request for Proposals (RFP) process, Intercare was selected to continue their partnership with the City.
RECOMMENDATIONS
Adopt a Resolution to approve and authorize the City Manager to execute a Consulting Services Agreement with Intercare for workers’ compensation third party administration services effective July 1, 2026, for an initial three (3) year term, with an option for two additional one-year extensions.
BACKGROUND
The City is self-insured for workers’ compensation claims and contracts with a Third-Party Administrator (TPA) to manage claims in compliance with State of California requirements. The City’s current TPA, Intercare Holdings Insurance Services (“Intercare”), provides the following services:
§ Claims administration and investigation
§ Medical management coordination
§ Litigation coordination
§ Regulatory reporting and compliance
§ Claims data reporting
The City’s current agreement with Intercare is set to expire on June 30, 2026, requiring a new contract to ensure uninterrupted service delivery.
On February 19, 2026, Human Resources issued RFP No.64281 for Workers’ Compensation Claims Administration Services. The RFP was publicly advertised in accordance with the City’s purchasing policies and applicable procurement requirements and distributed to qualified firms. The RFP closed on March 18, 2026, and the City received four (4) proposals from the following firms:
§ Sedgwick Claims Management Services, Inc.
§ Intercare Holdings Insurance Services, Inc.
§ Innovative Claim Solutions
§ LWP Claims Solutions
Analysis
Following a comprehensive review of qualifications and interviews, all firms demonstrated the ability to provide the required services. Intercare was selected based on its program knowledge and customer service approach to claims administration, compliance, medical management, and overall alignment with the City’s program. Staff also value Intercare’s experience with the City’s claims history, which is critical for operational continuity. Active claims are ongoing so retaining the current administrator minimizes disruption and implementation risk.
Year 1 - FY 2027
• Administration Services - $131,337.35
• Bill & Utilization Review - $58,529.49
• Total - $189,866.84
Year 2 - FY 2028
• Administration Services - $135,277.47
• Bill & Utilization Review - $60,220.85
• Total - $195,498.32
Year 3 - FY 2029
• Administration Services - $140,012.18
• Bill & Utilization Review - $61,977.89
• Total - $201,990.07
Year 4 - FY 2030 (Optional)
• Administration Services - $144,912.61
• Bill & Utilization Review - $63,802.58
• Total - $208,715.19
Year 5 - FY 2031 (Optional)
• Administration Services - $149,984.55
• Bill & Utilization Review - $66,681.06
• Total - $216,665.61
FINANCIAL IMPACT
The estimated annual cost for Intercare’s TPA services is $189,867. TPA service fees are split approximately between 70% Claims Administration Fees and 30% Bill and Utilization Review Service Fees. There are sufficient funds in the FY 2027 Biennial Budget and no impact to the Risk Management fund balance is anticipated. 3.5% increases are included in the contract beyond FY 2027 and may require incremental funding above planned baseline budget inflation.
ATTACHMENTS
A: Resolution Approving an Amendment to the Consulting Services Agreement with
Intercare Holdings Insurance Services, Inc. for Workers’ Compensation Third Party Claims Administration Services
B: Compensation Schedule & Reimbursable Expenses
C: Scope of Services between the City of San Leandro and Intercare Holdings Insurance Services, Inc
PREPARED BY: Yana Taran, Sr. Human Resources Analyst, Human Resources Department