Colorado workers’ compensation insurer of last resort Pinnacol Assurance has been coming under intense scrutiny is recent weeks from the Pinnacol Interim Committee who is investigating whether the insurer is “fulfilling its commitments” to Colorado workers. Last Friday, the committee voted to send several bills to the full Colorado Assembly for their consideration
Over the last few weeks, the committee has heard testimony from injured workers, employers, doctors and the insurance carrier themselves regarding their compensation practices and how they handle on-the-job injury claims.
Scores of injured workers were among the witnesses testifying that their on-the-job injury claims had been denied even after doctors determined what needed to be done. Some injured workers alleged the company threatened or even spied on them. Medical professionals report difficulty in getting approval for treatments and receiving payment.
Due to Pinnacol’s large cash reserves, many accuse the company of denying claims and hoarding profits. The committee also found the company even has incentives in place for employees who deny claims.
Pinnacol Assurance was created by the Colorado Assembly in the mid-1990s to act as the state’s workers’ compensation insurer of last resort. It replaced the state run Colorado Compensation Insurance Authority which had become a big financial drain on the state. Lawmakers thought Pinnacol would be able to operate more freely and effectively in the Colorado workers’ compensation market as a private entity.
But over time, Pinnacol has developed substantial cash reserves totaling close to $1 billion, which last year caught the interest of lawmakers struggling to close the state’s huge budget deficits. The General Assembly threatened to take Pinnacol back over but the company resisted, prompting the creation of the Pinnacol Interim Committee to find out if the company was operating legitimately.
After months of investigating, the committee found several problems with how the company operated and has proposed several bills to reform the Colorado workers’ compensation carrier.
Chair of the Interim Committee Senator Morgan Carroll (D-Aurora) comments “I’m really proud of this committee’s work. We had some long days and some heated discussions, but I truly believe that we came up with some good ideas which will help Colorado’s workers, improve Colorado’s businesses, and make sure our workers compensation insurer of last resort is stable, successful and solvent.”
Check back with the Colorado workers’ compensation and legal news blog from the Babcock Law Firm for any updates to the progress of this legislation.