Colorado Legislative Council Staff

STATE

FISCAL IMPACT

Drafting Number:

Prime Sponsor(s):

LLS 99-0144

Sen. Hernandez

Rep. Mace

Date:

Bill Status:

Fiscal Analyst:

January 14, 1999

Senate Business Affairs

Will Meyer (866-4976)

 

TITLE:            CONCERNING ADDITIONAL PERMANENT PARTIAL DISABILITY BENEFITS UNDER THE "WORKERS' COMPENSATION ACT OF COLORADO" FOR AN EMPLOYEE WHO IS DISABLED SO THAT THE EMPLOYEE IS RENDERED UNABLE TO MEET THE EMPLOYEE'S OCCUPATIONAL DEMANDS.



Fiscal Impact Summary

FY 1999/2000

FY 2000/2001

State Revenues

Cash Fund Exempt


 


 

State Expenditures

Cash Fund Exempt - Workers' Compensation


$53,955


$53,955

FTE Position Change

0.3 FTE

0.3 FTE

Other State Impact: None identified

Effective Date: Signature of the Governor

Appropriation Summary for FY 1999-2000: Department of Labor and Employment: $53,955 cash fund exempt, and Department of Personnel: $53,955 and 0.3 FTE.

Local Government Impact: None identified



Summary of Legislation


            The bill requires that an employee, who is disabled under the Workers' Compensation Act and as a result unable to meet the employee's occupational demands, receive nonscheduled (medical impairment) injury benefits upon reaching maximum medical benefit. The bill would become effective upon signature of the Governor and would apply to claims for injuries occurring on or after that date.



State Expenditures


            These changes to the Workers' Compensation Act will increase the workload of the Division of Workers' Compensation, Department of Labor and Employment and the Division of Administrative Hearings, Department of Personnel. The "American Medical Association Guides to the Evaluation of Permanent Impairment" (Guides) are used to define permanent impairment and require that disability be assessed by nonmedical means. It is assumed that disability will have to be determined by an administrative judge (ALJ), resulting in an increase in worker's compensation hearings.

            The bill also requires that the employee be unable to meet the "employee's occupational demands". It is assumed that this will also have to be determined by an ALJ, and would require expert testimony and require a workers' compensation hearing. The increase in the workload of the staff of the Division of Workers' Compensation to conduct prehearing conferences is minimal and can be absorbed within their existing resources.


            It is assumed that the hearing time for each case will increase by approximately 1.0 hour. Based on the number of claims heard by the Division of Administrative Hearings in FY 1997/98 containing permanent partial impairment issues of 345, it is estimated that the number of cases heard would increase to 420 in FY 1999/00. Assuming that a average hearing currently requires 1.6 hours, these 75 additional cases will require an additional 195 hours (75 cases times 2.6 hours per case). In addition, the current case base of 345 cases would require an additional 1 hour for a total of 345 hours to hear those cases. The number of hours of hearings would increase by 540 hours and would cost the Division of Workers' Compensation $53,955 each year beginning in FY 1999/00.


            The provisions of the bill also will impact the amount of permanent partial benefits paid by employers and their insurers to disabled employees.



State Appropriations


            This fiscal note implies that in FY 1999/00, $53,955 should be appropriated out of the Workers' Compensation cash fund balance to the Department of Labor and Employment, Division of Workers' Compensation. Out of this amount, $53,955 and 0.3 FTE should be appropriated to the Department of Personnel, Division of Administrative Hearings.



Departments Contacted


            Labor and Employment          Personnel