INTERIM COMMITTEE TO STUDY ISSUES RELATED TO PINNACOL ASSURANCE
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09:40 AM -- Public Testimony
David Cosson, Special Prosecutions Unit in Attorney General's Office testified. His unit is under contract with Pinnacol to provide investigative services in instances of fraud by employers and injured workers. He noted that if Pinnacol is a private entity, the unit will no longer be able to investigate fraud issues as Pinnacol would take the investigation in-house. Cases will be referred to local district attorneys who are not likely to take the cases so the state will see a reduction in workers' compensation fraud cases being dealt with.
Senator Mitchell asked about policy changes that could help fight fraud and Mr. Cosson recommended guidelines and penalties for employers who are classifying employees as independent contractors so that they don't have to provide workers' compensation coverage for them.
Mr. Cosson noted that the Division of Workers' Compensation does some investigation into insurance fraud for companies other than Pinnacol.
Senator Mitchell asked about the cost of fraud on the system. Mr. Cosson didn't have specific dollar numbers but noted that there are a large number of cases. Senator Carroll noted that the committee had been provided with information related to fraud.
Mr. Simon asked about prosecuting insurance companies which Mr. Cosson has not. They discussed provisions in statute regarding what constitutes an independent contractor. Mr. Cosson clarified that another unit does fraud investigation. His unit is funded directly by Pinnacol.
Representative Gardner asked for information about workers' compensation fraud. Mr. Cosson talked about issues related to workers' compensation that make fraud easier than some other kinds of insurance fraud. Pain is subjective. Workers may continue working while receiving benefits. Employers can easily misclassify employees to pay lower premiums.
Senator Tochtrop discussed a bill from last session (HB09-1310) about the misclassification of employees and suggested that may help the situation.
Commissioner Morrison explained that the Attorney General's Office has a section specifically for insurance issues.
Mr. Simon asked about prosecution of employers who don't have coverage. Mr. Cosson explained that would be a civil matter for the Division of Workers' Compensation. He would prosecute an employer for a forged certificate of insurance.
Paula Rhodes testified about her experiences with a workplace injury.
A member of the public addressed the committee and asked what issue is being discussed. He suggested that markets be opened up before he was removed by the sergeant.
Senator Carroll reopened the bill draft request portion of the agenda and Kristen Forrestal came to the table. The committee discussed the process for committee bills.
Senator Mitchell requested a bill about misclassification of employees and increasing enforcement authority.
Representative Pace requested a bill changing the process for hiring Pinnacol's CEO and president.
Attachment A provides a list of bill requests. The committee adjourned.