Overview of Legislation
INTERIM COMMITTEE TO STUDY ISSUES RELATED TO PINNACOL ASSURANCE
|Votes: View--> ||Action Taken: |
09:02 AM -- Overview of Legislation
Senator Carroll called the committee to order and explained the protocol for the interim committee bill approval process. First, the committee would receive a brief overview of each bill from the bill drafter followed by any comments from the committee member who requested the bill. Then the committee would hear public testimony on all of the bills at once and then amend and approve each of the bills.
09:03 AM -- Kristen Forrestal, Office of Legislative Legal Services (OLLS), presented Bill 1 concerning accountability for workers' compensation insurers (Attachment A). The bill was requested by Senator Hodge. Ms. Forrestal explained that the bill requires workers' compensation insurers to survey injured workers at the close of each claim. Senator Hodge added that the bill is a transparency bill. Senator Mitchell talked about the charge of the committee and questioned whether bills from the committee can address workers' compensation in general or only Pinnacol Assurance. A discussion ensued regarding the scope of the committee. Senator Harvey and Representative B. Gardner also commented on the issue. Senator Carroll responded and read the charge of the committee provided in Senate Bill 09-281. Mr. Ross added some comments on the charge of the committee and said that Pinnacol Assurance feels that the bills are outside the scope of the committee's charge.
09:21 AM -- Bart Miller, OLLS, presented Bill 2 concerning the functioning of Pinnacol Assurance, adding additional members to the board of directors of Pinnacol Assurance, and changing per diem compensation for members of the board (Attachment B). The bill was requested by Representative B. Gardner. Mr. Miller explained that the bill would increase the number of board members of Pinnacol Assurance from nine to 11, and add the Chief Executive Officer (CEO) as an ex officio member of the board. Mr. Johnson commented that the board would need more time to review the legislation before taking a position on the bill.
09:24 AM -- Bart Miller, OLLS, presented Bill 3, the Workers' Compensation Policyholder Protection Act of 2010 (Attachment C). The bill was requested by Representative Ryden. Mr. Miller explained that if the surplus of Pinnacol Assurance is greater than 1,000% of risk based capital, the bill would require the board of directors of Pinnacol Assurance to credit to the accounts of Pinnacol Assurance policyholders a dividend to bring the surplus of Pinnacol Assurance to less than 1,000% of risk based capital. For the prior approval of a pure premium rate filed by a workers' compensation insurance rating agency, the bill would require the insurance commissioner to approve the lowest rate recommended either by the rating organization or by the independent actuary employed by the division of insurance, unless the commissioner explains the rationale or justification for a different rate in the final agency order. The bill requires background material related to a workers' compensation pure premium rate filing to be posted on the division of insurance web site prior to any public hearing.
Representative Ryden commented on the bill. Senator Mitchell asked about the provision that changes the prior approval powers of the insurance commissioner. Representative Ryden stated that the bill would lower rates and narrow the window of the rates. Representative Gerou asked a similar question regarding the commissioner's duties. Senator Carroll asked the committee to hold questions for the sponsors to the end of the meeting when the bills are on the table for action and only ask questions of the drafters at this time.
09:31 AM -- Thomas Morris, OLLS, presented Bill 4 concerning limitations on the use of surveillance of employees who have submitted a workers' compensation claim (Attachment D). The bill was requested by Representative Pace. The bill would require an insurer or employer who wishes to conduct surveillance of an employee who has submitted a workers' compensation claim to present prima facie evidence that the employee's claim is fraudulent to a prehearing administrative law judge. It would also assess a fee to cover the cost of hearings and an additional fee of $50 to fund the injured worker advocate office. If no fraud is found, the insurer or employer must provide all materials collected during the surveillance to the injured worker. Finally, the bill creates a $1,000-per-day penalty for violations. Mr. Simon asked a question about an amendment that was distributed.
09:36 AM -- Kristen Forrestal, OLLS, presented Bill 5 concerning the creation of the injured worker advocate (Attachment E). Representative Pace requested the bill and said he would withdraw the bill so no discussion was needed.
09:37 AM -- Kristen Forrestal, OLLS, presented Bill 6 concerning the duties of the Pinnacol Assurance board of directors (Attachment F). She explained that the bill requires the board of directors of Pinnacol Assurance to charge less, pay more, and direct employees of Pinnacol Assurance to not ask injured workers difficult questions. Senator Mitchell requested the bill.
09:38 AM -- Dan Cartin, OLLS presented Bill 7 concerning disclosure by members of the General Assembly of an interest in legislation that amends the provisions of the "Workers' Compensation Act of Colorado" prior to voting or abstaining from voting on such legislation (Attachment G). The bill was requested by Senator Mitchell. Mr. Cartin explained that the bill would require that a member of the General Assembly who has a personal or private interest in any measure or bill proposed or pending before the general assembly that amends the provisions of the "Workers' Compensation Act of Colorado" must disclose that fact to the house of which he or she is a member prior to voting or abstaining from voting on the measure or bill. A personal and private interest is defined in the bill. Mr. Cartin explained that the bill was modeled after ethical principals in the Code of Ethics for the General Assembly. Senator Mitchell stated that legislators avoid conflicts by abstaining more often than rules require but members of a class need to be recognized before voting. Senator Tochtrop suggested making disclosure transparent on every bill introduced by making the rules broad enough to cover all legislation, not just workers' compensation. Senator Harvey supported this point and recommended amending the bill.
09:44 AM -- Bart Miller, OLLS, presented Bill 8 for Duane Gall concerning the reinstatement of vocational rehabilitation benefits in workers' compensation (Attachment H). The bill was requested by Representative Ryden. The bill would also require the Director of the Division of Workers' Compensation to maintain a list of eligible providers.
09:46 AM -- Jeremiah Barry, OLLS, presented Bill 9 concerning the appointment of the CEO of Pinnacol Assurance (Attachment I). The bill was requested by Representative Pace. The bill provides that the appointment of the CEO of Pinnacol Assurance is subject to the consent of the Senate. Mr. Ross asked what would happen if a new CEO started while the Senate is out of session. Mr. Barry said they would serve until session starts.
09:48 AM -- Kristen Forrestal, OLLS, presented Bill 10 concerning the privatization of Pinnacol Assurance (Attachment J). The bill was requested by Senator Mitchell. Ms. Forrestal explained the provisions of the bill. Senator Mitchell stated that Pinnacol Assurance does not want to be private, but would like to stay as is and he withdrew the bill.
09:51 AM -- Kristen Forrestal, OLLS, presented Bill 11 concerning the board of directors of Pinnacol Assurance (Attachment K). The bill was requested by Representative Miklosi. Ms. Forrestal stated that the bill would require that two employee members of the board of directors of Pinnacol Assurance be nonmanagement employees. The bill adds two additional members to the board: an injured worker and the executive director of the Colorado Department of Labor and Employment or his or her representative. The bill also changes the way the board is paid from a per diem compensation of $140 to $12,000 per year. It requires the board to post the date, time, and location of board meetings on the Pinnacol Assurance web site at least 7 seven calendar days prior to a meeting. Lastly, the bill requires the board to allow reasonable time for public comment at all board meetings. Mr. Johnson asked the difference between a policy holder and a non management worker. Mr. Ross asked whether the injured worker in the bill can be any injured worker or an injured worker covered by Pinnacol Assurance. Representative Miklosi responded that the injured worker can be any injured worker.
09:53 AM -- Thomas Morris, OLLS, presented Bill 12 concerning increased penalties for violations of the workers' compensation laws (Attachment L). The bill was requested by Senator Tochtrop. The bill increases the penalty for violating the workers' compensation laws from up to $500 to up to $1,000 and changes the mental state from "willfully" to "knowingly" in the statute that penalizes denying workers' compensation medical benefits, delaying payment of medical benefits for more than 30 days, or stopping payments. The director of the Division of Workers' Compensation or an administrative law judge may apportion the penalties, in whole or part, among the aggrieved party, the medical services provider, and the workers' compensation cash fund. Representative Gerou asked about the $500 to $1,000 change and whether it is similar to other penalties.
09:58 AM -- Bart Miller, OLLS, presented Bill 13 concerning measures to reduce conflicts of interest in workers' compensation cases (Attachment M). The bill was requested by Senator Carroll. Section 1 of the bill requires a physician who has been proposed by the Division of Workers' Compensation in the Department of Labor and Employment to perform an Independent Medical Examination (IME) of an injured worker to disclose any business, employment, financial, or advisory relationship with an insurer or self-insured employer if a party requests the information. Section 1 gives a party to the IME process the right to obtain and review the information regarding any physicians proposed to conduct the IME prior to making a determination to eliminate one of the proposed physicians as an examiner. Section 1 of the bill also directs the director of the division to adopt rules as necessary to implement the disclosure requirements.
Section 2 of the bill prohibits the payment of a financial incentive by an insurer, self-insured employer, or health care provider to deny or delay a workers' compensation claim, or to deny or delay medical care or payment for medical treatment for any such claim. Section 2 of the bill declares that a violation of its provisions constitutes bad faith and an unfair or deceptive practice in the business of insurance and subjects the person committing the violation to penalties under the unfair or deceptive insurance practices statutes, which may be up to $3,000 per violation, not to exceed an aggregate penalty of $30,000, or, in the case of knowing violations, up to $30,000 per violation, not to exceed an aggregate penalty of $750,000 annually. Section 2 of the bill also subjects persons violating its provisions to penalties under the "Workers' Compensation Act of Colorado".
Section 3 specifies that contractual provisions that establish a reversionary interest in an insurer are void as against public policy. Senator Carroll talked about an amendment she has to the bill. Mr. Ross asked some questions regarding Section 3 and reversionary interest.
10:06 AM -- Jeremiah Barry, OLLS, presented Bill 14 concerning a brochure to describe the process for workers' compensation claims (Attachment N). The bill was requested by Representative Miklosi. Representative Miklosi commented on the bill.