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2018/19 Workers' Compensation Program - Memorandum of Coverage EFFECTIVE JULY 1, 2018 - JULY 1, 2019 Issued to the City of La Quinta MEMORANDUM OF COVERAGE: PRIMARY WORKERS’ COMPENSATION PROGRAM July 1, 2018 - July 1, 2019 MEMORANDUM OF WORKERS’ COMPENSATION AND EMPLOYER’S LIABILITY COVERAGE ADMINISTERED BY THE CALIFORNIA JOINT POWERS INSURANCE AUTHORITY MEMBER: La Quinta MAILING ADDRESS: 78-495 Calle Tampico La Quinta, CA 92253 PROTECTION LIMITS: Workers’ Compensation: Statutory Employer’s Liability: $10,000,000 per Occurrence PROTECTION PERIOD: From July 1, 2018 at 12:01 a.m. Pacific Time until July 1, 2019 at 12:01 a.m. Pacific Time. This Memorandum is a description of the terms and conditions of the Program through which certain specified and limited self-insured risks of liability are administered by the Authority and shared by its Members. This Memorandum is not an insurance policy. As provided in Section 990.8 of the California Government Code and appel late court cases of Orange County Water District v. Association of California Water Agencies JPIA (1997) and City of South El Monte v. Southern California Joint Powers Insurance Authority (1995), the pooling of self-insured claims or losses among the Members of the Authority shall not be considered insurance nor be subject to regulation under the Insurance Code. California JPIA President MEMORANDUM OF COVERAGE: PRIMARY WORKERS’ COMPENSATION PROGRAM July 1, 2018 - July 1, 2019 TABLE OF CONTENTS 1. INTRODUCTION ___________________________________________________ 1 2. PROTECTION PROVIDED ___________________________________________ 1 A. Workers’ Compensation ___________________________________________ 1 B. Employer’s Liability _______________________________________________ 3 C. Other Coverages ________________________________________________ 5 3. DEFINITIONS _____________________________________________________ 5 4. EXCLUSIONS _____________________________________________________ 7 5. CONDITIONS AND RESPONSIBILITIES ________________________________ 8 Memorandum of Coverage Page 1 of 16 July 1, 2018 – July 1, 2019 Primary Workers’ Compensation MEMORANDUM OF COVERAGE: PRIMARY WORKERS’ COMPENSATION PROGRAM July 1, 2018 - July 1, 2019 1. INTRODUCTION This Memorandum (hereinafter Memorandum) is a description of the terms and conditions of the Primary Workers’ Compensation Program and Employer’s Liability Coverage (hereinafter Program) through which certain self-insured risks of workers’ compensation and employer’s liability are administered by the Authority and shared by its Members pursuant to the Joint Powers Agreement creating the Authority under the provisions of §6500 et seq. of the Government Code. As provided in §990.8 of the Government Code, pooling of losses in this Program is not insurance. The sole duty of the Authority is to administer the Program adopted by the Members. The Authority will pay on behalf of Members the liability only for Claims or losses which are pooled under the terms of this Memorandum and the Joint Powers Agreement. The provisions of the Program are subject to and subordinated to the Joint Powers Agreement or any action taken by the Executive Committee or the Board of Directors in connection with the Program. This Program has been adopted pursuant to action taken by the Executive Committee, and is subject to any amendment, modification or extension by the Executive Committee or the Board of Directors at a regular meeting or at a special meeting called for that purpose. The terms of this Memorandum shall be construed in an evenhanded fashion in accordance with the principles of California contract law. If the language of this Memorandum is alleged to be ambiguous or unclear, the issue of how the protection should apply shall be resolved in a manner most consistent with the relevant terms of this Memorandum without regard to authorship of the language and without any presumption of arbitrary interpretation or construction in favor of either the Member or the Authority. Any controversy or dispute arising out of or related to an interpretation or breach of this Memorandum shall be settled in accordance with the appeals procedures as set for th in this Memorandum. Throughout this Memorandum, words and phrases that appear in bold print are defined in Section 3. Definitions. 2. PROTECTION PROVIDED In consideration for Member’s payment of the required primary deposit for participation in this Program, and subject to all terms and conditions set forth in this Memorandum, the Program agrees to provide the following protection: A. Workers’ Compensation The Program will pay on behalf of the Member workers’ compensation benefits for bodily injury by accident or occupational disease, including resulting death, deemed compensable under the laws of the State of California, and sustained by an Employee. Memorandum of Coverage Page 2 of 16 July 1, 2018 – July 1, 2019 Primary Workers’ Compensation MEMORANDUM OF COVERAGE: PRIMARY WORKERS’ COMPENSATION PROGRAM July 1, 2018 - July 1, 2019 Such payments, including any settlements, shall be made at the Authority’s sole discretion. The Program will provide for the administration and defense of Claims for workers’ compensation benefits, including investigation, payment of benefits, compliance with reporting requirements for Claims administration, and settlement. The Program, at its discretion, will choose and manage service providers necessary to fulfill its objectives; including third party Claims administrators, medical management providers, defense attorneys, investigators, etc. Coverage is subject to the following conditions: 1. Bodily injury by accident must arise out of and in the course of employment by the Member and must occur during the Protection Period. 2. Occupational disease must be caused by or aggravated by the conditions of employment, and the exposure must occur during the Protection Period. 3. Bodily injury or occupational disease from presumptive causations contained in Labor Code §3212 et seq. or other California governmental codes must occur during the Protection Period. 4. Coverage is limited to amounts the Member is legally liable to pay after apportionment to pre-existing, concurrent or subsequent injuries or illnesses as defined by law. 5. The Program will pay temporary disability, permanent disability and death benefits at the statutory rates defined in the California Labor Code (Labor Code Division 4, Part 2, Chapter 2, Articles 3, 4, 4.5 and 5). If the Member pays the Employee for periods of temporary disability per a salary continuation plan under a collective bargaining agreement, memorandum of understanding or other employment agreement, the Program will reimburse the Member at the statutory temporary disability benefit rate for those periods paid by the Member. 6. If the Employee is eligible to receive salary continuation in lieu of temporary disability under Labor Code §4850 et seq., the Program will reimburse the Member at the statutory rate for temporary disability benefits that the Member would be obligated to pay if Labor Code §4850 et seq. did not apply. 7. Employees on temporary assignment or traveling for Member business outside the State of California who sustain an injury or occupational disease are covered for benefits under this Program. Benefits will be paid on behalf of the Member up to the amount payable under the workers’ compensation laws of the State of California, regardless of the jurisdiction selected by the Employee. Memorandum of Coverage Page 3 of 16 July 1, 2018 – July 1, 2019 Primary Workers’ Compensation MEMORANDUM OF COVERAGE: PRIMARY WORKERS’ COMPENSATION PROGRAM July 1, 2018 - July 1, 2019 B. Employer’s Liability The Program will indemnify the Member, where permitted by law, for Loss arising from bodily injury or occupational disease, including resulting death. 1. Coverage is subject to the following conditions: (a). Bodily injury by accident must arise out of and in the course of employment by the Member. Occupational disease must be caused by or aggravated by the conditions of employment. The accident or period of exposure must occur during the Protection Period. Bodily injury does not include emotional distress, anxiety, discomfort, inconvenience, depression, dissatisfaction or shock to the nervous system, unless caused by either a manifest physical injury or a disease with physical dysfunction or condition resulting in treatment by a licensed physician or surgeon. (b). Bodily injury or occupational disease suffered by Employee is not covered by workers’ compensation law. (c). The Employee’s duties are necessary or incidental to work conducted by the Member. (d). The Member timely and fully pursues all available remedies for contribution or indemnification from any and all other available sources. (e). The original Claim or Suit and related legal actions for damages are brought in the State of California or under the laws of the State of California. 2. Subject to the foregoing provision of Section B. Employer’s Liability, the Program shall: (a). Indemnify the Member for all sums legally payable as damages under this section. Damages include: i. Amounts for which the Member is liable to a third party by reason of a Claim, Suit or proceeding against the Member to recover damages suffered by the third party; or ii. Damages for care and loss of services of an injured employee of the Member; or iii. Damages for consequential bodily injury to a spouse, child, parent, or sibling of the Employee, provided that such damages are the direct consequence of injury or disease arising out of and in the course of the Employee’s employment by Member. iv. Injury or disease to an Employee arising out of and in the course of employment, claimed against the Member in a capacity other than as Employer. Memorandum of Coverage Page 4 of 16 July 1, 2018 – July 1, 2019 Primary Workers’ Compensation MEMORANDUM OF COVERAGE: PRIMARY WORKERS’ COMPENSATION PROGRAM July 1, 2018 - July 1, 2019 v. Such payments, including any settlements, shall be made at the Authority’s sole discretion. (b). Defend, at the Program’s expense, any Claim, proceeding or Suit against the Member for damages payable under this section. The Program has the right to investigate and settle these Claims, proceedings and Suits. The Program has no duty to defend any Claim, proceeding or Suit that is not covered by this Program. The Program has no duty to defend or continue defending after the Program has paid its maximum amount of coverage. (c). Pay the following costs, in addition to the other amounts payable under this section, as part of any Claim, proceeding or Suit the Program defends: i. Reasonable expenses incurred at the Program’s expense, but not loss of earnings; ii. Premiums for bonds to release attachments and for appeal bonds in bond amounts up to twice the maximum amount of coverage under this Program; iii. Litigation costs taxed against the Member; iv. Interest on a judgment as required by law; and v. Other expenses incurred by the Program in discharging the obligation of the Program or its members under this section. 3. The following are excluded from coverage under this section: (a). Damages arising out of the actual or alleged discharge; coercion; criticism; demotion; evaluation; reassignment; discipline; defamation; harassment; humiliation; discrimination against; termination of; wrongful dismissal or discharge; breach of any oral or written employment contract or quasi-employment contract; misrepresentation; violation of employment discrimination laws; workplace sexual or other harassment; wrongful failure to employ or promote; wrongful discipline; negligent evaluation; wrongful demotion; wrongful deprivation of a career opportunity; employment - related invasion of privacy, defamation or wrongful infliction of emotional distress; or any other personnel practices, policies, acts or omissions, of any Employee, including Claims brought under Americans with Disabilities Act, Family Medical Leave Act, Pregnancy Disability Leave Act, Equal Opportunities Act, Fair Employment and Housing Act, Fair Labor Standards Act; or any other such State or Federal act; (b). Any obligation of any type that is imposed by a workers’ compensation, occupational disease, unemployment compensation, Memorandum of Coverage Page 5 of 16 July 1, 2018 – July 1, 2019 Primary Workers’ Compensation MEMORANDUM OF COVERAGE: PRIMARY WORKERS’ COMPENSATION PROGRAM July 1, 2018 - July 1, 2019 occupational health and safety law, or disability benefits law, or any similar law; (c). Damages for any injury or disease for any Employee engaged in work subject to the Longshore and Harbor Workers’ Compensation Act, the Outer Continental Shelf Lands Act, the Defense Base Act, the Jones Act, the Federal Employers Liability Act, or any other Federal workers’ compensation or occupational disea se law, or any international workers’ compensation law; (d). Punitive or exemplary damages, however characterized, or damages, fines or penalties imposed under the Migrant and Seasonal Agricultural Worker Protection Act, or for violation of any other Federal, state, county or other law, regulation or ordinance; C. Other Coverages 1. Defense of Serious & Willful Misconduct Allegation (Labor Code §4553) or Alleged Discrimination Prohibited by Labor Code §132a . The Authority may, at its own discretion, elect to defend a Member against Claims alleging Serious & Willful Misconduct or a violation of §132a. Such defense will be provided by an attorney assigned by the Authority. Any penalties awarded for Serious & Willful Misconduct or violation of §132a will be the responsibility of the Member. The Member may elect to defend itself with counsel of its own choosing, at its own expense. 3. DEFINITIONS A. Authority means the California Joint Powers Insurance Authority. B. Bodily Injury means bodily injury, sickness, or disease sustained by any person, including death resulting from any of these at any time. C. Claim means a notice, demand, or Suit against a Member to recover Damages. Claim does not include an administrative claim filed with the Equal Opportunity Employment Commission or the California Department of Fair Employment and Housing or any other administrative or regulatory agency. D. Damages means compensation in money recovered by a party for loss or detriment it has suffered. Damages does not include defense of Claims or any punitive, exemplary or multiplied damages or non-monetary relief or redress or injunctive relief. E. Defense Costs means all fees and expenses incurred in connection with the administration, investigation, defense, and appeal of a Claim covered hereunder, including attorney fees, court costs, premiums for appeal bonds, and interest on judgments accruing after the entry of judgment, and also shall include the costs of any Claims administrator or defense counsel assigned by the Authority to respond to any Claim on behalf of the Authority. Defense Costs shall not Memorandum of Coverage Page 6 of 16 July 1, 2018 – July 1, 2019 Primary Workers’ Compensation MEMORANDUM OF COVERAGE: PRIMARY WORKERS’ COMPENSATION PROGRAM July 1, 2018 - July 1, 2019 include the office expenses of the Member, nor the salaries of Employees or officials of the Member, nor expenses of any Claims administrator engaged by the Member. Defense Costs also do not include any fee or expense relating to coverage issues between the Authority and any Member. F. Discrimination means injury caused by or arising out of: 1. Unlawful discrimination because of race, sex, color, age, religion, or national origin, or membership in any similarly legally protected class; or 2. Violation of the discrimination prohibitions of the Americans with Disabilities Act of 1990, any rules or regulations promulgated thereunder and amendments thereto or similar provisions of any Federal, state, or local statutory law or common law. G. Employee includes any person falling within the definition of “employee” under Labor Code Division 4, Chapter 2, Article 2, beginning with §3351. Volunteers are considered employees under this Memorandum only if the Member has a resolution in effect, and passed prior to the date of injury or illness at issue, providing workers’ compensation coverage to volunteers under Labor Code §3363.5, and while performing specific functions in the course and scope of authorized activities under the direction and control of the Member. H. Loss means amounts actually paid by the Program for statutory workers’ compensation benefits, employer’s liability Claims and allocated costs for investigation, administration and defense of Claims under this Memorandum of Coverage. I. Member means the entity, including all of its departments and constituent agencies, which has adopted a resolution to participate in the Program and become a signatory to the Joint Powers Agreement creating the Authority as may be amended from time to time, whose name appears on the Cover Page of this Memorandum. Member includes any other agency for which the Member’s governing board or council acts as the governing board, and also includes any commissions, agencies, districts, authorities, redevelopment agencies, boards, or similar entities coming under the Member’s direction and control. Member shall include any other agency authorized by the Authority’s Board of Directors. The Member must be approved for self-insurance by the Office of Self Insurance Plans and maintain its qualification for self -insurance during the Protection Period. J. Memorandum means this Memorandum of Coverage - Workers’ Compensation and Employer’s Liability Coverage authorized by the Joint Powers Agreement of the Authority specifying the terms and conditions of the Program. K. Occurrence means a single accident or event causing bodily injury to one or more employees; or occupational disease sustained by one or more employees as a result of an outbreak of the same communicable disease, or sudden and accidental exposure to the same environmental hazard. Memorandum of Coverage Page 7 of 16 July 1, 2018 – July 1, 2019 Primary Workers’ Compensation MEMORANDUM OF COVERAGE: PRIMARY WORKERS’ COMPENSATION PROGRAM July 1, 2018 - July 1, 2019 L. Program means the California Joint Powers Insurance Authority’s Workers’ Compensation and Employer’s Liability Program described by this Memorandum and the Joint Powers Agreement of the Members creating the Authority. The Program is a fund created by the Members for the purpose of pooling self-insured losses. M. Protection Period means the time period shown on the Cover Page of this Memorandum. N. Suit means a civil proceeding in which a Member is named as a defendant or cross-defendant, or an arbitration proceeding or alternative -dispute resolution proceeding to which a Member submits with the Authority’s written consent. 4. EXCLUSIONS This Memorandum, including any obligation to indemnify, defend or pay Defense Costs, does not apply to: A. The Member’s obligation to pay salary in lieu of temporary disability benefits under Labor Code §4850, except to the extent that the Member would be obligated to pay temporary disability benefits in the absence of the mandate of §4850. B. The Member’s obligations under Labor Code §4856 to provide health benefits. C. Injury or disease to an Employee while knowingly employed in violation of law; D. Injury or disease intentionally caused or aggravated by or at the direction of the Member; E. Penalties or fines imposed for violation of Labor Code 132a or Labor Code §4553 (Serious & Willful Misconduct); F. Penalties or self-imposed benefit increases for violations of Labor Code §5814 et seq. attributable to the Member’s actions; G. Damages arising out of, or in any way related to, operations with respect to which the Member: 1. Has violated or failed to comply with any workers’ compensation law, or any provision thereof, or 2. Has rejected any workers’ compensation law. H. Any Claim, Suit, liability, or alleged liability for punitive or exemplary damages or fines or other damages imposed primarily for the sake of example and by way of punishing the Member, including liability of a Member to defend or pay damages where the governing body thereof has elected to provide a defense or pay damages for a Claim, action or judgment for punitive or exemplary Damages. I. Any liability for which the Member is obligated to pay Damages by reason of liability assumed in a contract or agreement. Memorandum of Coverage Page 8 of 16 July 1, 2018 – July 1, 2019 Primary Workers’ Compensation MEMORANDUM OF COVERAGE: PRIMARY WORKERS’ COMPENSATION PROGRAM July 1, 2018 - July 1, 2019 5. CONDITIONS AND RESPONSIBILITIES A. General Obligations The Member agrees to abide by all employment, equal opportunity, anti -discrimination, health and safety laws, statutes and regulations. It understands that, among other obligations, it has a non-delegable duty to provide employees with a safe place to work, and training in safe work practices. The Member agrees to abide by all applicable wage and hour laws, collective bargaining agreements, memoranda of understanding, and other statutes and regulations regarding working conditions. The Member agrees to immediately report every occupational injury or illness which results in medical treatment, or any claim by an Employee for workers’ compensation benefits, to the Authority or the Authority’s designated administrator, but in no instance to cause the delay of such report of injury, illness or claim more than five days after date of knowledge or as otherwise required by Labor Code §6409.1. The Member agrees to give every employee a claim form pursuant to Labor Code 5401 within one working day of receiving notice or knowledge of a claim or potential claim. In the event of an injury or illness, the Member agrees to provide first aid or arrange for appropriate immediate medical care. The Member agrees to provide suitable temporary modified or alternate duty whenever possible for employees with workers’ compensation injuries, and agrees to conduct interactive accommodation meetings as required by Fair Employment and Housing Act. B. Inspection and Audit The Authority shall be permitted but not obligated to inspect the Member’s records, property and operations at any time. Neither the Authority’s right to make inspections, nor the making thereof, nor any report hereon shall constitute an undertaking, on behalf of or for the benefit of the Member or others, to determine or warrant that such property or operations are safe or healthful, or are in compliance with any law, rule or regulations. The Authority may examine and audit the Member’s books and records at any time during the Protection Period and extensions thereof, and within three years after the final termination of this Program, as far as they relate to the subject matter of this Memorandum. C. Member’s Duties in the Event of Occurrence, Claim or Suit 1. In the event of any Occurrence, written notice containing particulars sufficient to identify the Member and also reasonably obtainable information with respect to the time, place, and circumstances thereof, and the names and addresses of the injured and of available witnesses, shall be given by or for the Member to the Authority’s claims administrator as soon as practicable, but no later than required by statute or regulation. 2. If a Claim is made against a Member, the Member shall immediately forward to the Authority’s claims Administrator every demand, notice, Memorandum of Coverage Page 9 of 16 July 1, 2018 – July 1, 2019 Primary Workers’ Compensation MEMORANDUM OF COVERAGE: PRIMARY WORKERS’ COMPENSATION PROGRAM July 1, 2018 - July 1, 2019 summons or other process received by the Member or the Member’s representative. 3. The Authority’s Claims Administrator will review the Claim, and under the direction of the Authority, undertake the administration of the Claim, including investigation, defense and settlement, as appropriate. 4. The Member shall cooperate with the Authority and, upon the Authority’s request, assist as appropriate in the resolution of the Claim, including enforcing any right of contribution or indemnity against any person or organization who may be liable to the Member because of injury or damage to an Employee or Member property. The Member shall not voluntarily make any payment, assume any obligation or incur any expense. D. Privacy and Confidentiality of Claim Records All Claim records, including Claim files, examiners notes, medical reports, subpoenaed records, correspondence, tapes and films, and whether electronic or hard files, are the property of the Authority. Because these records may contain confidential or private medical and/or psychological information related to workers’ compensation Claims administered by or on behalf of the Authority, access to Claim files and the information contained therein is restricted to the Authority and its agents and assignees, with the exception that the Member is entitled to medical information limited to the diagnosis of the mental or physical condition for which workers’ compensation is being claimed and the treatment provided for this condition, or what is necessary for the Member to have in order to provide temporary or permanent modification or accommodation of the employee’s work duties. E. Change in Conditions If a Member experiences a significant change in operations or conditions, the Member shall notify the Authority as soon as practicable, and the Authority has the right to an underwriting review and to collect additional primary deposits as may be appropriate to reflect the added exposure to the Program. The additional primary deposit must be paid within ninety days of notice. F. Other Protection If collectible insurance or any other coverage or protection with any insurer, self-insured employer, joint powers authority or any other source, is available to the Member covering a loss also protected hereunder (whether on a primary, excess or contingent basis), the protection hereunder (including any Defense obligation) shall be in excess of, and shall not contribute with, such insurance or other coverage or protection, provided that this clause does not apply with respect to any insurance purchased by a Member specifically to be in excess of this Memorandum. Under no circumstances shall the protection afforded by this Program be considered primary, pro rata, concurrent or co-existent with such insurance, coverage, or other protection. Memorandum of Coverage Page 10 of 16 July 1, 2018 – July 1, 2019 Primary Workers’ Compensation MEMORANDUM OF COVERAGE: PRIMARY WORKERS’ COMPENSATION PROGRAM July 1, 2018 - July 1, 2019 G. Termination or Amendment This Memorandum may be terminated or amended at any time in accordance with the Joint Powers Agreement and Bylaws of the Authority. H. Changes to Memorandum Notice to any agent or knowledge possessed by any agent of the Authority or by any other person shall not effect a waiver of or a change in any part of this Memorandum, nor shall the terms of this Memorandum be waived or changed, except by a written addendum issued by the Authority to form a part of this Memorandum. I. Subrogation and Recovery The Authority shall be subrogated to the extent of any payment hereunder to all the Member’s rights of recovery thereof. This section applies to all recoveries from thi rd parties or governmental agencies. The Member shall do nothing after loss to prejudice such rights and shall do everything necessary to secure such rights. The Authority shall have standing to seek subrogation recovery in its own name or in the name of the Member, and the Member shall cooperate with and assist the Authority in pursuing such recovery, including assigning its right to recover subrogated amounts, and if necessary, executing a written agreement to effect such assignment. Any amount so recovered shall be credited to the workers’ compensation file. J. Assignment There is no assignment of interest permitted under this Memorandum. K. Joint Powers Agreement The provisions of this Memorandum are subject to and subordinate to the terms and provisions of the Joint Powers Agreement creating the Authority, and in the event of any conflict between the terms and provisions of said Joint Powers Agreement and this Memorandum, the terms and provisions of the Joint Powers Agreement shall control. L. Appeal of Disputes Should a dispute arise between the Member and the Program, the following conditions will apply: 1. No party is entitled to appeal or arbitrate Claims under this Memorandum other than the Member. 2. Any disputes concerning coverage, protection, Defense obligations, or procedures of the Program, as interpreted by the Authority’s staff, shall be appealed to the Authority’s Executive Committee in accordance with the following procedures. 3. A Member may request any determination of a lack of coverage made by the Authority to be reviewed by the Chief Executive Officer. Such a request shall be in writing and must be made within 90 days of the date of notice from the Claims Administrator. Memorandum of Coverage Page 11 of 16 July 1, 2018 – July 1, 2019 Primary Workers’ Compensation MEMORANDUM OF COVERAGE: PRIMARY WORKERS’ COMPENSATION PROGRAM July 1, 2018 - July 1, 2019 4. Upon request, the Chief Executive Officer shall review a determination of a lack of coverage made by the Claims Administrator or Authority staff and shall send to the Member a written determination of coverage. 5. If a Member disagrees with the coverage determination by the Chief Executive Officer, the Member may appeal the decision to the Appeals Committee. The Appeals Committee consists of the Executive Committee and the chairs of the Managers and Finance Officers Committees. Appeals must be in writing within 90 days of the date of the Executive Director's written decision. The appeal request must state why the Member disagrees with the denial, and the Member should present any information that may have a bearing on the ultimate determination of coverage. 6. The appeal request shall be presented by Authority staff to the Appeals Committee, on a regularly scheduled Executive Committee meeting day, allowing time for sufficient review and agenda deadlines. Staff shall notify the Member in advance of the meeting at which its appeal will be presented. 7. If the Member would like to personally address the Appeals Committee, the Member or the Member’s representative may attend the meeting and speak to the issue. 8. The Appeals Committee may refer the appeal to the Coverage Committee and consider the recommendation of the Coverage Committee during its deliberation on the appeal. The Appeals Committee’s decision is final. Authority staff will notify the Member of the Appeals Committee’s decision in writing. 9. Following a final determination regarding a Claim, consideration of the decision may be reopened at the request of the Member if circumstances change as follows: (1) a new and distinct Claim arising out of the prior occurrence is presented to the Member, or (2) new and distinct causes of action are added to the Claim. If the new Claim or causes of action are reasonably thought by the Member to be covered, the Appeals Committee will reconsider the issue, in accordance with the procedure in section, upon request. Any request for such reconsideration must be in writing within 90 days of the notice to the Member of the new Claim or cause of action. 10. If a Member disputes a coverage issue, then, during the course of the administrative and arbitration proceedings provided herein, the Authority shall defend the Claim against the Member and have the right to control any settlement of that Claim, subject to the right of the Authority to recover from the Member any amounts paid out by the Authority for such defense or settlement which are finally determined by the Appeals Committee, or as a result of the Binding Arbitration Process, not to be owed by the Authority under the Program. Memorandum of Coverage Page 12 of 16 July 1, 2018 – July 1, 2019 Primary Workers’ Compensation MEMORANDUM OF COVERAGE: PRIMARY WORKERS’ COMPENSATION PROGRAM July 1, 2018 - July 1, 2019 M. Arbitration If the Member has followed the coverage Appeals Procedure outlined in Section 5. L. Appeal of Disputes and disagrees with the final determination of the Appeals Committee, the Member may request consideration of the coverage issue through the Authority’s binding arbitration process. The Arbitration Process shall be as follows: 1. Following a decision by the Appeals Committee, the appealing Member shall notify the Chief Executive Officer in writing, within thirty days of the Appeals Committee’s final decision, that it wishes to participate in Binding Arbitration and shall submit a non-refundable $1,000 arbitration appeal fee. The written notice shall specify the grounds for the arbitration. 2. Following payment of the arbitration appeals fee, the name of each Member, other than the appealing Member and the Members represented on the Appeals Committee, shall be placed in an unmarked envelope. Each envelope shall be placed in a box and eleven envelopes shall be drawn by the Chief Executive Officer. A representative of the appealing Member may be present at the drawing. 3. The managers of the eleven Members shall be the pool of potential arbitrators. The eleven Members and the names of their managers shall be given in writing to the appealing Member. 4. The appealing Member shall have the right to strike two or less names from the pool for any reason which shall not be disclosed. The Authority shall have the right to strike two or less names from the pool for any reason which shall not be disclosed. The appealing Member and the Authority must strike names within five business days of the drawing. The right of either party to strike names shall lapse at 5:00 PM on the fifth business day following the drawing. Notice of names stricken by either party shall be given in writing to the other party prior to 5:00 PM on the fifth day following the drawing. 5. The remaining managers shall be contacted by the Chief Executive Officer to determine their willingness to serve on the arbitration panel. If more than five are willing to serve, each name shall be placed in an unmarked envelope, put in a box, and the Chief Executive Officer shall draw five envelopes from the box. The individuals whose names are drawn shall be the arbitration panel and they shall be disclosed in writing to the appealing Member. 6. If only five are willing to serve, they shall be the arbitration panel. 7. If fewer than five are willing to serve, the name of each Member not drawn in the previous selection drawing shall be placed in an unmarked envelope, put in a box, and four envelopes shall be drawn for each arbitration panel position needed to complete a five-Member panel. A representative of the Memorandum of Coverage Page 13 of 16 July 1, 2018 – July 1, 2019 Primary Workers’ Compensation MEMORANDUM OF COVERAGE: PRIMARY WORKERS’ COMPENSATION PROGRAM July 1, 2018 - July 1, 2019 appealing Member may be present at the drawing. The names drawn shall be disclosed to the appealing Member who may reject, for any reason which shall not be disclosed, one name for each four names drawn. The Authority may also reject one name for each four names drawn and shall not disclose the reason. Names rejected by the appealing Member and the Authority must be rejected within 48 hours of the drawing. The right to reject names shall lapse 48 hours following the drawing. 8. The managers or chief executive officers of the Members remaining shall be contacted by the Chief Executive Officer to determine their willingness to serve on the arbitration panel. The names of those willing to serve shall be placed in unmarked envelopes, put in a box, and the number necessary to fill out the arbitration panel shall be drawn by the Chief Executive Officer and disclosed in writing to the appealing Member. A representative of the appealing Member may be present at the drawing. 9. This process shall be repeated until five Members are obtained for the arbitration panel. 10. The arbitration panel Members shall be compensated at the rate of $125 per half-day or portion thereof. If a panel Member is required to stay away from home overnight, lodging shall be paid by th e Authority. Necessary meals shall be provided for all panel Members. Mileage costs shall be reimbursed by the Authority at its standard rate. 11. The cost of the arbitration panel shall be borne by the Authority. The cost of presentation by the appealing Member, including preparation, exhibits, attorneys, and all other costs of the Member shall be paid by the Member. 12. The arbitration panel may request legal counsel that shall be selected by the Chief Executive Officer and paid for by the Authority. Legal counsel shall not be the counsel for the Authority that has advised the staff and Executive Committee. However, counsel for the Authority may participate in or make the presentation to the arbitration panel on behalf of the Authority, as requested by the Chief Executive Officer. 13. The parties to the arbitration shall not be governed by formal rules of evidence. 14. The arbitration panel’s decision shall be final and binding on the Member and the Authority. Decisions of the arbitration panel shall be by majority vote. 15. The decision of the arbitration panel shall be written and shall govern the issue decided but may be referred to by the Authority and future arbitration panels for precedent.