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Second Regular Session
Sixty-first General Assembly
LLS NO. 980542.01 DHG
HOUSE BILL 981196
STATE OF COLORADO
BY REPRESENTATIVE Arrington
BUSINESS AFFAIRS & LABOR
A BILL FOR AN ACT
CONCERNING ELIMINATION OF THE COMMONLAW CAUSE
OF ACTION FOR BADFAITH BREACH OF AN INSURANCE CONTRACT UNDER
THE "WORKERS' COMPENSATION ACT OF COLORADO", AND, IN
CONNECTION THEREWITH, ESTABLISHING ADMINISTRATIVE REMEDIES FOR
FAILURE TO PAY BENEFITS WHEN DUE.
(Note: This summary applies to this bill as introduced
and does not necessarily reflect any amendments that may be subsequently
Explicitly precludes an injured worker from pursuing a tort claim against a workers' compensation insurer based on the commonlaw cause of action for badfaith breach of an insurance contract. Legislatively overrules recent Colorado supreme court opinions that found such a cause of action is not precluded by the current workers' compensation statute.
Replaces the current 8% penalty for failure to make
timely payment of medical benefits to a $500perday
penalty, payable to the injured worker and applicable whenever
such payments are more than 30 days past due.
Be it enacted by the General Assembly of the State of Colorado:
SECTION 1. 843201, Colorado Revised Statutes, is amended to read:
843201. Disputes arising under "Workers' Compensation Act of Colorado" statutory remedies exclusive. (1) The director and administrative law judges employed by the division of administrative hearings in the department of personnel shall have original jurisdiction to hear and decide all matters arising under articles 40 to 47 of this title; except that the following principles shall apply: A claimant in a workers' compensation claim shall have the burden of proving entitlement to benefits by a preponderance of the evidence; the facts in a workers' compensation case shall not be interpreted liberally in favor of either the rights of the injured worker or the rights of the employer; and a workers' compensation case shall be decided on its merits.
(2) THE STATUTORY REMEDIES PROVIDED IN ARTICLES 40 TO 47 OF THIS TITLE ARE HEREBY DECLARED TO BE THE EXCLUSIVE REMEDIES AVAILABLE TO INJURED WORKERS. THE COMMONLAW TORT CAUSE OF ACTION FOR BADFAITH BREACH OF AN INSURANCE CONTRACT, IN THE CONTEXT OF WORKERS' COMPENSATION COVERAGE, IS HEREBY EXPLICITLY ABOLISHED.
SECTION 2. 843401 (2) (a), Colorado Revised Statutes, is amended to read:
843401. Attorney general,
district attorney, or attorney of division to act for director
or office penalties for failure of insurer to pay benefits.
(2) (a) After all appeals have been exhausted
or in cases where there have been no appeals, all insurers and
selfinsured employers shall pay benefits within thirty days
of when any benefits are due. If any insurer or selfinsured
employer willfully delays payment of medical benefits for more
than thirty days or willfully stops payments, such insurer or
selfinsured employer shall pay a penalty to the
INJURED WORKER of eight percent of
the amount of wrongfully withheld benefits
FIVE HUNDRED DOLLARS PER DAY. If any insurer or selfinsured
employer willfully withholds permanent partial disability benefits
within thirty days of when due, the insurer or selfinsured
employer shall pay a penalty to the division
INJURED WORKER of ten percent of the amount of such benefits due.
SECTION 3. Effective date applicability. (1) This act shall take effect at 12:01 a.m. on the day following the expiration of the ninetyday period after final adjournment of the general assembly that is allowed for submitting a referendum petition pursuant to article V, section 1 (3) of the state constitution; except that, if a referendum petition is filed against this act or an item, section, or part of this act within such period, then the act, item, section, or part, if approved by the people, shall take effect on the date of the official declaration of the vote thereon by proclamation of the governor.
(2) The provisions of this act shall apply to cases of injuries occurring on or after the applicable effective date of this act.