Workers comp bills are moving along

Measures to change the state workers compensation law are moving forward.

The Senate has approved two of the Pinnacol Assurance bills on second reading: 

· SB-11, “Disclosure of Workers’ Compensation Conflicts of Interest,” which is sponsored by Sen. Morgan Carroll (D-Aurora).

· SB-12, “Penalties on Worker’s Compensation Benefits,” which is sponsored by Sen. Lois Tochtrop (D-Thornton). Defeating this bill is a priority of the CACI Governmental Affairs Council.

SB-12 increases the penalty for violating the workers’ compensation laws from up to $500 per day to up to $1,000 per day. The bill allows the Director of the Division of Workers’ Compensation in the Colorado Department of Labor and Employment or an administrative law judge (ALJ) to apportion the proceeds, in whole or in part, to the aggrieved party, a medical services provider and/or the Workers Compensation Cash Fund. The bill also changes the mental state from “willfully” to “knowingly” for denying or delaying payment of benefits.

Governmental Affairs Council’s Concerns with SB-12 

By decreasing the standard from “willfully” to “knowingly” for denying/delaying payment of benefits, this change creates a lower standard that could adversely punish insurers for prudently slowing or stopping a claim in order to pursue proper proof or fraud investigations. This change will likely increase the number of penalties assessed. 

Currently, if an adjuster “willfully” denies/delays payment, they are subject to penalties. If the “willfully” standard is changed to “knowingly,” it removes the adjuster’s intent in a situation.

For example, if an adjuster knows a check is going to be late because the mail won’t be delivered that day–and obviously cannot control the U.S. Postal Service schedule-then the adjuster will be subject to penalties.

SB-12 allows for an apportionment of proceeds, which will increase costs for all parties, including employers and insurers, and further incentivize claimants to pursue penalties for the most minor of infractions, such as a late mail delivery.

This bill gives extraordinary powers to the Director of the Division of Workers’ Compensation or an ALJ for the assessment of increased penalties without allowing for a proper hearing.

 Members of the Governmental Affairs Council who are actively working with CACI to defeat this bill include: Property and Casualty Insurers Association, Pinnacol Assurance, Tri-State Generation and Transmission Association, Colorado Civil Justice League, West Chamber Serving Jefferson County, Metro North Chamber of Commerce, Arvada Chamber of Commerce, Aurora Chamber of Commerce, Colorado Auto Dealers Association and Colorado Motor Carriers Association. 

Meanwhile, two bills remain on the Senate Calendar for Second Reading:

· HB-1009, “Pinnacol Assurance Board of Directors,” sponsored by Rep. Joe Miklosi (D-Denver) and Sen. Mary Hodge (D-Brighton);

· SB-13, “Workers’ Compensation Accountability,” sponsored by Sen. Hodge and Rep. Su Ryden (D-Aurora).

 HB-1012, “Limiting Surveillance of Workers’ Compensation Claims,” sponsored by Sen. Carroll, remains in the Senate Judiciary Committee, which she chairs, but the bill has not yet been scheduled for a vote. CACI and other business organizations strongly oppose HB-1012 in its current form.

 For more information on the Pinnacol bills, contact Loren Furman at 303.866.9642 or via e-mail at lfurman@COchamber.com or Dan Anglin, CACI Governmental Affairs Representative, at 303.866.9641 or via e-mail at danglin@COchamber.com
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