2017 saw more legislative action related to workers’ compensation than Pinnacol has seen for the past few years. Three bills were introduced in the Colorado Legislature, and all three passed. Notably, all were the product of extensive stakeholder discussions; as a result, there was relatively little opposition to each (in fact, one passed both chambers unanimously). Initial analyses do not indicate there will be an appreciable impact on customer premiums from any of these.
HB 1119, uninsured employer fund
Developed by the Division of Workers’ Compensation, this bill started out with two components and ultimately added a third:
- Gives the DOWC director some discretion in the way fines are levied on employers that have been found to (illegally) lack workers’ comp coverage. Current law is inflexible on the fines, which seems appropriate — except when you see instances of companies going out of business because they thought they had coverage but did not and were subject to fines amounting to hundreds of thousands of dollars. In those cases, employees lose their jobs and the state of Colorado gets no money. Allowing the DOWC to enter into settlement agreements in certain cases enables those small businesses to remain in operation and pay both their employees and the state.
- Establishes a fund to provide limited medical benefits to injured workers whose employers did not have workers’ comp coverage. The fund will be fed by fines on uninsured employers and by redirecting some existing dollars from the DOWC. In the early stages of discussions about this bill, the DOWC proposed financing the fund through a premium assessment. Pinnacol and the business community spoke out loudly against the idea of penalizing law-abiding companies to pay for the misdeeds of those companies that don’t obey the law, and we were concerned about the adverse incentive this approach would create. We appreciate the fact the DOWC listened to those concerns and came up with a different financing mechanism.
- Establishes limited reciprocity between Colorado and Wyoming to ensure that Wyoming coverage extends to workers who have “random and fortuitous” exposure in Colorado (i.e., are not employed here for any significant length of time).
The bill was supported by a number of business organizations as well as by Pinnacol. This bill has been signed by Gov. Hickenlooper.
HB 1229, PTSD coverage for first responders and those similarly situated
This bill strikes a compromise to put to rest an issue that has arisen repeatedly in the Legislature in recent years. Colorado law stipulates that an employee may file a “mental only” (i.e., no physical injury occurs) claim only as a result of situations that are outside that worker’s usual experience. As a result, some police officers, firefighters, EMTs and others in related areas of work have found it difficult to make workers’ comp claims for mental impairments/PTSD because violent incidents are deemed to be within their usual experience. While that is true, some of these professionals have encountered repeated exposure to gruesome events that are not part of their typical experience, yet they have struggled to secure the coverage and care they need to help them deal with the impacts.
Pinnacol opposed previous legislation on this issue because those bills struggled to achieve a balance that was fair to these professionals, maintained appropriate coverage for other occupations and protected the interests of employers. In an effort to strike that balance, we worked with the Fraternal Order of Police and the Colorado Municipal League to develop a narrowly written compromise. It allows workers to claim workers’ comp coverage for PTSD in a limited set of circumstances based on repeated exposure to violent incidents. It also retains the existing requirement that outside these few exceptions that apply primarily to peace officers and first responders, mental impairment coverage applies only when an incident is outside a worker’s usual experience. This approach gives first responders and those in related circumstances the coverage they need and is fair, while not opening the coverage so broadly that it can be frivolously claimed by those in other occupations.
A review of 10 years of Pinnacol data on such mental-only claims shows that the average payout is about $1,000; accordingly, we do not anticipate a significant impact on premiums for affected customers. Most business organizations were neutral on the bill, which had bipartisan sponsorship and broad bipartisan support in both chambers. This bill has been signed by the governor; it will take effect in July 2018.
SB 214, firefighter cancer fund
In 2007, the Colorado Legislature passed a bill establishing a presumption that certain cancers, when contracted by firefighters, resulted from on-the-job exposure. Although this presumption is rebuttable, meaning that employers can introduce evidence that the cancer was not related to the job, some fire agencies have seen significant premium increases as a result of that law. Accordingly, the fire chiefs and firefighters’ union jointly developed a proposal to create a voluntary prepaid fund that firefighters can access to offset their cancer-related medical costs. The bill establishing the fund stipulates that if a fire department or district pays into the fund, the presumption will not apply.
The bill, which takes effect this July, passed both chambers unanimously and already has been signed by the governor. Pinnacol is currently analyzing the impact on our fire agency customers and will communicate with them and their agents as we get more clarity on those implications.