Busy legislative session for workers’ comp

The 2021 legislative session wrapped up June 8. We saw more action on the workers’ comp front than we’ve witnessed in recent years, but not as much as we prepared for. Rumors of additional state regulation of workplace safety did not come to fruition (though that doesn’t mean we won’t see them in the future). 

Three bills were ultimately introduced. Two of these were particularly concerning because of their substance and the fact that they were surprises. Pinnacol has had a long-standing agreement with the Colorado Self-Insurers Association (CSIA) and the Workers’ Compensation Education Association (WCEA; trial attorneys for injured workers): We meet before the Legislature convenes to discuss and negotiate legislative proposals from the participants, and none of these entities will introduce a bill that all three have not agreed on. This approach has largely immunized Colorado’s workers’ comp system from swinging between extremes depending on which party is in power; it’s helped ensure a good balance between fair benefits for injured workers and reasonable rates for businesses. The fact that the trial attorneys and their allies ran bills without advance warning, much less negotiation, is a troubling sign. 

Here’s a summary of the three bills directly affecting the workers’ comp system this session:

• HB 1050 was the product of Pinnacol/CSIA/WCEA negotiations in 2019. It makes a number of relatively minor administrative and benefit changes, none of which are estimated to have an impact on rates. It passed its final vote May 21 and is expected to be signed by the governor soon.
  
• HB 1207 limits an insurer’s or employer’s ability to recover overpaid wage replacement benefits in certain circumstances. Proponents were specifically concerned about the (relatively infrequent) situations in which an independent medical examination finds that an injured worker achieved maximum medical improvement sooner than the treating physician determined, meaning that the worker has been receiving benefits to which they are no longer deemed entitled and must pay them back. Pinnacol succeeded in amending the bill to ensure that, in such cases, we may still offset overpayments against future benefits. The bill was signed by the governor May 17.
  
• SB 197 would have allowed injured workers to receive care from any Level I or II accredited physician; currently, they are required to select from an employer-provided list of at least four providers. The bill also created new opportunities for injured workers to change providers. As a whole, it would have extended time to treat and delayed return to work, created new opportunities for litigation, and erased the financial, quality and service advantages of  Pinnacol’s network. We estimated the bill could increase premiums for Pinnacol policyholders by as much as 15% annually, in addition to eliminating the 2.5% premium credit we are required to give policyholders that designate providers. Working closely with the business community and other insurers, Pinnacol was able to elicit serious concerns from legislators about both the substance of the bill and the lack of stakeholder outreach leading up to it (we received the bill the night before it was introduced). As a result, on May 27, the sponsors killed it themselves. They have said they want to launch stakeholder discussions in the interim.
  

In addition, of course, we supported an attempt to privatize Pinnacol in exchange for a payment reflecting the state’s interest in the company. While there was bipartisan interest in that proposal after mid-2020 COVID-19-induced budget cuts, most legislative support vanished in the face of strong opposition from organized labor and the trial bar once the budget picture improved dramatically. Pinnacol was deeply grateful to the many business organizations across the state that supported the proposal.