1. County of Los Angeles Workers’ Compensation Program & Costs PRESENTED BY: Alex Rossi Chief Executive Office Risk Management Branch PRESENTED AT: RTW Seminar DATE: September 10, 2008

2. County of Los Angeles Workers’ Compensation Program Self-Insured since 1969. Excess coverage ended in 1977. Pay-as-you-go funding method. Claims Administration Services outsourced in FY 1986- 87. Currently, four WC Third Party Claims Administration (TPA) contracts. CEO WC Monitoring Program. Currently, two Medical & Disability Management Cost Containment contracts.

3. Workers’ Compensation RFP & Services Overview  Claims Management and Benefit Delivery  Return-To-Work  Cost Containment  Litigation Management  Information Systems  Anti-Fraud Program (SIU)  Program Development  Fee Structure – Claims Management  Fee Structure – Cost Containment  Bundling vs. Unbundling  Performance Management  Avoiding Problems

4. County of Los Angeles Projected Annual Workers’ Compensation Paid Costs $millions Actual through 2007/08

5. Workers’ Compensation Trust Fund Budget & Actual

8. Workers’ Compensation Compensable Lost Time Benefit Expense FY 02-03FY 03-04FY 04-05FY 05-06FY 06-07FY 07-08 100% IA LC 4850 $49.82 M$47.13 M$40.13 M$34.89 M$35.84 M$33.52 M 70% IA 6.20.070 $12.76 M$13.03 M $8.81 M $7.12 M $6.91 M $6.05 M State TD$29.83 M$33.73 M$30.21 M$27.34 M$27.24 M$25.86 M TOTAL$92.41 M$93.89 M$79.15 M$69.35 M$69.99 M$65.43 M

9. COMPARISON OF ESTIMATED OUTSTANDING LOSSES As of 30-Jun-0430-Jun-0530-Jun-0630-Jun-0730-Jun-08 Estimated outstanding losses$2,627,884,540$2,556,222,203$2,435,203,729$2,262,596,742$2,176,317,242 Projected ultimate losses for FY 2004-05$521,020,150Included above Actual WCTF and Salary Continuation/Labor Code 4850 Paid in FY 2004-05($322,129,571)Included above Projected ultimate losses for FY 2005-06$573,498,072$473,392,311Included above Actual WCTF and Salary Continuation/Labor Code 4850 Paid in FY 2005-06($305,310,610) Included above Projected ultimate losses for FY 2006-07$501,551,655 $424,918,858Included above Actual WCTF and Salary Continuation/Labor Code 4850 Paid in FY 2006-07($322,999,578) Included above Projected ultimate losses for FY 2007-08$439,896,164 $360,457,330Included above Actual WCTF and Salary Continuation/Labor Code 4850 Paid in FY 2007-08($324,955,262) Included above Total 1 $3,388,455,560$3,017,796,883$2,652,063,911$2,298,098,810$2,176,317,242 Note: The earliest available projected ultimate losses for a given fiscal year are used when no other estimate is available.

10. Recommendations for Handling Long-Term IA Leaves Do provide the workers’ compensation third-party administrator with a list of all long-term IA leave employees. Do request a claim status on all workers’ compensation claims where the employee is on long-term leave. Do schedule more complex long-term IA leave claims to be discussed at claim review meetings. Do not wait for claim reviews to address long-term IA leave claims. Do not wait for workers’ compensation claims issues to be resolved before addressing employer obligations under the FEHA.